KOSPI Remains Uncertain Next Week... "Inflation and Tightening Concerns Persist"

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] The domestic stock market is expected to continue its volatile trend next week as well. This is because market volatility is inevitable until inflation stabilization indicators are confirmed.

NH Investment & Securities projected the KOSPI weekly expected band for next week (9th~13th) to be between 2630 and 2750 points. Although some uncertainty regarding the intensity of U.S. monetary tightening, which was the biggest concern in the stock market, has somewhat eased, concerns about inflation still remain.

Kim Young-hwan, a researcher at NH Investment & Securities, explained, “It seems difficult to confirm a significant slowdown in inflation from the U.S. April inflation data to be released on the 11th (local time),” adding, “The U.S. core Consumer Price Index (CPI) is also unlikely to show a significant decline.”

The rise in international oil prices due to the EU’s ban on Russian oil imports is also negative. Researcher Kim said, “Energy prices are also showing instability as part of sanctions against Russia,” and analyzed, “Since uncertainties surrounding inflation and tightening have not been completely resolved, the index is likely to gradually raise its upper limit over the next 2 to 3 months while confirming inflation stabilization.”

Lee Jae-yoon, a researcher at SK Securities, also said, “The April U.S. CPI data to be released on the evening of the 11th will serve as a turning point for the stock market’s direction regarding whether inflation has peaked.” He added, “If the inflation peak is not confirmed in the April CPI, uncertainty about monetary policy is likely to intensify again ahead of the June Federal Open Market Committee (FOMC) meeting.”

Seo Jung-hoon, a researcher at Samsung Securities, emphasized, “It is important to form a structure where real interest rates rise while expected inflation eases,” and advised, “For the time being, conservative responses are necessary rather than hasty investment decisions.” However, he explained that the method of phased buying of large-cap stocks with high valuation appeal remains valid from a mid- to long-term perspective.

Moon Nam-jung, a researcher at Daishin Securities, also advised that a safe and effective strategy is necessary as market uncertainty may increase. Researcher Moon analyzed, “Focus should be on high-dividend stocks with low volatility,” and “It is necessary to pay attention to sectors that can guarantee earnings stability.” Lee Eun-hyuk, a researcher at KB Securities, said, “The market is expected to remain uncertain until the June FOMC,” and advised, “In a market without policy benchmarks, fluctuations based on indicator releases are inevitable, so individual stock strategies focusing on sectors with supply-demand gaps will still be effective.”

Meanwhile, according to the Korea Exchange, this week the KOSPI closed at 2644.51, down 1.88% from the previous week, and the KOSDAQ index ended at 884.22, down 2.27%. Both indices fell sharply on the 6th following the steep drop in the New York stock market on the 5th (local time), widening the decline.

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