US CPI Hits Highest in 40 Years... Korean Stock Market Rises on Inflation Peak-Out Expectations

KOSPI Up 0.4% Compared to Previous Trading Day
KOSDAQ Also Starts Up 0.23%

[Asia Economy Reporter Kwon Jae-hee] Although the U.S. Consumer Price Index (CPI) last month hit the highest level in 40 years, the Korean stock market started higher as expectations for an inflation peak-out expanded. However, with the possibility of a big step (0.50 percentage point hike) in the Federal Reserve's benchmark interest rate increasing, foreign investors maintained their selling positions.

According to the Korea Exchange on the 13th, both the KOSPI and KOSDAQ started higher and maintained their upward momentum. The KOSPI opened at 2,677.53, up 0.40% (10.77 points) from the previous trading day, and the KOSDAQ index opened at 915.89, up 0.23% (2.07 points) from the previous day. On the 12th local time, the CPI recorded 8.5%, the highest in 40 years, which was expected to raise concerns about inflation, but investor sentiment actually improved. The market analyzed that the CPI not being as high as feared awakened investor sentiment.

Seo Sang-young, a researcher at Mirae Asset Securities, said, "The U.S. stock market's decline due to the possibility of prolonged inflation is likely to weigh on our stock market as well," but added, "However, as confirmed through the U.S. CPI, the expanded expectations for an inflation peak-out are positive."

On the other hand, the U.S. stock market closed lower. The Dow Jones Industrial Average fell 0.26% to 34,220.36, the S&P 500 dropped 0.34% to 4,397.45, and the Nasdaq index also declined 0.3% to 13,371.57.

Although expectations for an inflation peak-out have increased, foreign investors still adhere to 'Sell Korea.' As of 10:10 a.m. today, foreign investors were net sellers of 7.2 billion KRW and 55.8 billion KRW in the KOSPI and KOSDAQ, respectively.

Han Ji-young, a researcher at Kiwoom Securities, said, "The domestic stock market will show limited price movement as upward and downward factors coexist, including expectations for an inflation peak-out, a forecasted decline in the won-dollar exchange rate, uncertainties over the Ukraine situation, and concerns about inflation entrenchment." She added, "However, following companies' strong first-quarter earnings announcements, the domestic stock market is expected to increase incentives for bargain buying, securing downside rigidity for the index."

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