[Good Morning Stock Market] US Stocks Rebound on Progress in Ukraine Ceasefire Talks... "Focus on Foreign Investor Flows"

[Image source=Yonhap News]

[Asia Economy Reporter Myunghwan Lee] On the 24th (local time), the U.S. stock market closed higher, supported by solid economic indicators and progress in ceasefire negotiations in the Ukraine war. Amid rising concerns about a global economic slowdown, the favorable U.S. economic data boosted risk asset appetite. The Nasdaq index showed a clear rise, gaining 1.92% compared to the previous day, led by large technology stocks expected to report improved earnings. The Dow Jones Industrial Average and the Standard & Poor's (S&P) 500 index also rose by 1.02% and 1.44%, respectively. The strong performance of the U.S. stock market is expected to have a positive impact on the Korean stock market. There are also forecasts that changes will unfold centered on stocks expected to show earnings improvements, depending on foreign investors' supply and demand trends.

Sangyoung Seo, Researcher at Mirae Asset Securities: "Changes centered on stocks expected to show earnings improvements... Attention needed on foreign investors' supply and demand"

On the 25th, the Korean stock market is expected to start with a rise of around 0.5%. The previous day, the Korean stock market opened lower due to aggressive monetary policy remarks from U.S. Federal Reserve (Fed) officials but narrowed its losses following news of progress in Ukraine ceasefire negotiations. Although it failed to turn to a rise due to supply and demand burdens such as the spread of foreign net selling, it showed resilience.

The strong U.S. stock market, supported by solid U.S. economic data and progress in Ukraine war ceasefire talks, is favorable for the Korean stock market. Related issues affected the Korean stock market the previous day, but risk asset appetite increased. The Philadelphia Semiconductor Index surged 5%, and technology stocks expected to show earnings improvements led the U.S. stock market firmly, which is also positive.

The Korean stock market is expected to see changes centered on sectors expected to show earnings improvements. However, attention should be paid to the direction of foreign investors' supply and demand, considering the global economic slowdown and the Fed's hawkish stance.

Jiyoung Han, Researcher at Kiwoom Securities: "A rebound centered on semiconductor and IT stocks is expected... Rotation is likely to continue"

The domestic stock market, which showed weakness on the 24th, is expected to rebound on the 25th, led by semiconductor and IT stocks, supported by the recovery of risk asset sentiment and the sharp 5.1% rise in the Philadelphia Semiconductor Index. Although macro uncertainties remain high, the ongoing reopening momentum in sectors such as transportation and hotels in major countries including the U.S. is expected to create favorable conditions for domestic reopening-related stocks.

As inferred from recent domestic stock price trends, short-term rotation between sectors and styles appears to be occurring depending on improvements or deteriorations in the macro environment (political and social issues). This rotation market is expected to continue until mid-April, when inflation indicators and the first-quarter earnings direction of major companies can be gauged. However, considering the difficulty of sustaining market timing strategies, a suitable alternative would be to continuously hold sectors and stocks expected to show earnings growth or to approach with staggered purchases during price corrections in the rotation process.

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