[Good Morning Stock Market] US Tech Stocks Rally... Can We Expect Foreign Investors to Buy Back?

[Asia Economy Reporter Ji Yeon-jin] The U.S. stock market closed higher on the 4th (local time) as buying momentum in technology stocks actively flowed in. Chinese technology companies listed on the New York Stock Exchange also continued their upward trend following news of accounting cooperation from the Chinese government. Attention is focused on whether the domestic stock market will also show an upward trend as foreign investors turned to net buying just before the market closed the previous day, repeating a rebound buying pattern.

◆ Han Ji-young, Kiwoom Securities Researcher = The Nasdaq, which had plunged more than 20% from its 52-week high at one point in March, has now narrowed its decline to less than 10%, moving out of bear market territory (a drop of 20% or more from the high) and correction territory (a drop of 10% or more from the high). The rapid recovery of the U.S. stock market, which serves as the global leading stock market, appears to be improving overall global risk asset sentiment.

Today, the domestic stock market is expected to show strength centered on growth styles such as platforms and electric vehicles, benefiting from the sharp rise in the U.S. stock market led by the Nasdaq. Recently, the domestic stock market has shown less overall index momentum compared to the U.S. market, exhibiting characteristics of a market driven by small and mid-cap stocks and specific themes. This seems to be strongly influenced by the continued net selling by foreign investors amid high macroeconomic uncertainty. However, if macro sensitivity decreases due to debates such as the short- and long-term interest rate spread, or if expectations for the earnings season build after the upcoming earnings announcements from major companies like Samsung Electronics and LG Electronics, the possibility of a rebound in large-cap stocks should be kept open.

◆ Seo Jeong-hoon, Samsung Securities Researcher = In the U.S. stock market, Tesla’s Elon Musk’s large-scale accumulation of Twitter shares for long-term holding caused Twitter’s stock price to surge 27.1%, marking the highest daily return since its listing. Large-cap technology stocks with high market capitalization also showed strong gains. Apple and Microsoft rose 2.4% and 1.8%, respectively, while Alphabet and Amazon increased by 2-3%. Meta Platforms rose 4.0%, and Tesla increased 5.6%. Semiconductor stocks also showed strength. Nvidia rose 2.4%, AMD 2.2%, and Micron Technology and Western Digital closed with gains around 2%. On the other hand, airline and travel-related stocks weakened due to a notable rise in oil prices.

In the domestic stock market the previous day, foreign investors showed a slight net buying trend for the first time in seven trading days. Considering the significant selling pressure so far, some rebound buying from these investors can be expected. Sectors that experienced heavy foreign selling in the first quarter include software, hardware, automobiles, and durable consumer goods.

◆ Choi Yoo-jun, Shinhan Financial Investment Researcher = In the domestic stock market the previous day, there was a wait-and-see sentiment in the semiconductor sector ahead of Samsung Electronics’ preliminary first-quarter earnings this week. Nuclear power-related stocks rose due to the presidential transition committee’s consideration of designating special zones near nuclear power industry areas, and cement stocks showed strength following news of price hikes driven by rising thermal coal prices and cement supply shortages. As domestic COVID-19 cases approached 100,000 over the past weekend, endemic expectations boosted consumer goods sectors such as cosmetics, apparel, distribution, and advertising, but construction stocks fell due to rising building material prices and a wait-and-see stance on DSR regulation easing.

The earnings season begins with Samsung Electronics’ preliminary first-quarter earnings announcement on the 7th. Market participants have mixed views on the memory semiconductor industry, and attention is focused on whether hints can be found in the earnings report. Although uncertainties regarding external factors remain, relatively higher confidence in domestic reopening is expected to sustain the relative strength of consumer goods sectors for the time being.

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