[Good Morning Stock Market] US Stocks Show Strength in Tech Sector... "Foreign Investor Flows Should Be Watched"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Myung-hwan Lee] Despite concerns about inflation, the prolonged Ukraine crisis, and aggressive remarks from U.S. Federal Reserve (Fed) officials, the U.S. stock market closed higher, led by major technology stocks. This is interpreted as highlighting the solid fundamentals of companies. The Korean stock market is expected to show an upward trend due to the recovery of risk asset preference sentiment following the sharp rise in the U.S. stock market. The clear strength of technology stocks in the U.S. market is also expected to have a positive impact on related sectors in the Korean market. However, there is advice to pay attention to foreign investors' supply and demand.

Sang-young Seo, Researcher at Mirae Asset Securities: "Pay attention to foreign investors' supply and demand... Korean stock market expected to start with about 0.5% rise"

The Korean stock market is also expected to start with about a 0.5% rise, buoyed by the previous day's strength in the U.S. stock market. As the U.S. market showed strength centered on major technology stocks despite various adverse factors, related sectors in the Korean market are also expected to perform well.

On the previous day, Fed Chair Jerome Powell hinted at a 50 basis point rate hike in May, and other Fed officials joined in with aggressive comments related to monetary policy. As consumption slows due to prolonged inflation, the rapid pace of Fed rate hikes is leading to downward revisions of global gross domestic product (GDP) growth forecasts.

Nevertheless, the solid fundamentals of companies stood out, sustaining a favorable trend in the U.S. stock market. Especially ahead of the earnings season, buying was concentrated on major technology stocks expected to report strong results. Tesla rose 7.91% on expectations of the start of production at its German Gigafactory, and Alphabet gained 2.77% on news of preparations for the launch of fully autonomous driverless cars. Other tech stocks such as Amazon (2.10%) and Apple (2.08%) also showed strength.

However, concerns about the Fed's aggressive monetary policy, the slowdown in U.S. consumption due to inflation, and downward revisions of global GDP growth are burdens for the Korean stock market. Therefore, it is necessary to pay attention to foreign investors' supply and demand in the Korean market. Depending on whether foreign investors focus on the economic slowdown issue or on expectations of easing U.S.-China tensions, supply and demand may vary.

Ji-young Han, Researcher at Kiwoom Securities: "Rise centered on U.S. growth stocks... Domestic market expected to show upward trend"

On the 23rd, the domestic stock market is expected to show an upward trend, supported by expectations of a recovery in risk asset preference sentiment following the sharp rise in the U.S. stock market. The rebound in the U.S. market, led by major growth stocks such as Tesla (7.9%) and Apple (2.1%), is expected to have a positive impact on the stock prices of related companies in the domestic market. However, since the recent rebound in growth stocks also had a technical rebound character due to perceptions of excessive declines, future stock prices are expected to continue differentiated trends depending on whether earnings outlooks improve.

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