[Good Morning Stock Market] Easing Expectations on Ukraine Situation 'Subtle'... Will It Lead Kospi Rise?

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The U.S. stock market closed higher on the 17th (local time) amid hopes for a de-escalation of the Ukraine crisis. Although the market initially declined due to a rise in international oil prices?April delivery West Texas Intermediate (WTI) crude oil on the New York Mercantile Exchange (NYMEX) rose 8.4% ($7.94) to $102.98 per barrel?the market rebounded after President Recep Tayyip Erdogan proposed mediating a summit between Russia and Ukraine. The Dow Jones Industrial Average and the large-cap-focused S&P 500 rose 1.23%, while the tech-heavy Nasdaq increased by 1.33%. On the 18th, the domestic stock market is expected to be influenced by the positive effect of the U.S. market's rise.

◆ Seo Sang-young, Researcher at Mirae Asset Securities = Amid ongoing negotiations between Ukraine and Russia, Turkey, which has significant concerns about wheat imports due to the crisis, has called for a summit. Ukrainian Foreign Minister Dmytro Kuleba announced, "Turkey is mediating direct talks between the leaders of Ukraine and Russia," raising the possibility of high-level negotiations. Although the International Energy Agency (IEA) announced that about 3 million barrels per day of Russian oil supply could be cut off starting next month, causing a sharp rise in international oil prices, the U.S. stock market was not significantly affected as this was not a rise due to a new issue.

The fact that the U.S. stock market successfully rebounded after digesting early selling pressure is expected to have a positive impact on the domestic market. Additionally, expectations for a resolution to the Ukraine crisis are also seen as a positive factor. However, the decline of over 3% in Alibaba and other China-related companies in the U.S. market is a burden. This also raises the possibility of weakness in the Chinese stock market, which could lead to a contraction in investor sentiment. The domestic market is expected to start with a rise of around 0.3%, but it is anticipated to go through a process of digesting selling pressure while paying close attention to changes in the Chinese stock market.

◆ Han Ji-young, Researcher at Kiwoom Securities = There has been no meaningful news of a negotiated settlement in the Ukraine crisis yet. However, it is important to note that the war situation itself is not worsening further. Also, the possibility of a summit between Ukrainian President Volodymyr Zelensky and Russian President Vladimir Putin, led by Turkey, is a positive factor.

On this day, the domestic stock market is expected to show a strong trend as uncertainty eases following the U.S. and the Bank of England (BOE) raising their benchmark interest rates by 0.25 percentage points. Furthermore, the decision by Shenzhen City in Guangdong Province, China, to partially lift lockdown measures imposed due to the spread of COVID-19 is analyzed to alleviate concerns about worsening and prolonged supply shortages originating from China.

This content was produced with the assistance of AI translation services.