[Good Morning Stock Market] US Market Led by Tech Stock Gains... KOSPI Sector-by-Sector Market Outlook

[Image source=AP Yonhap News]

[Asia Economy Reporter Myunghwan Lee] On the 22nd, the domestic stock market is expected to start with a slight rise and then exhibit a sector-by-sector market trend. This is influenced by the previous day’s U.S. stock market closing higher due to the European Central Bank (ECB)’s big step (a 0.5 percentage point interest rate hike) leading to a weaker dollar and Tesla’s strong earnings announcement. Stock price fluctuations are also expected based on the earnings of major companies scheduled to report on the domestic market that day.

On the 21st (local time), the Nasdaq index, centered on technology stocks, closed at 12,059.61, up 1.36% (161.96 points) from the previous trading day. The Dow Jones Industrial Average rose 0.51% (162.06 points) to 32,036.90, and the Standard & Poor’s (S&P) 500 index closed at 3,998.95, up 0.99% (39.05 points).

Despite concerns about economic slowdown, U.S. companies have consecutively reported better-than-expected earnings. Tesla, which announced earnings after the market closed the previous day, posted net profits exceeding expectations despite production disruptions at its Shanghai factory. Tesla’s stock price rose about 9.8% during the day’s trading. Philip Morris also reported earnings surpassing expectations, jumping 4.2%.

Sangyoung Seo, Head of Media Content Division at Mirae Asset Securities: "A sector-by-sector market trend will unfold amid strong technology stocks."

On the 22nd, the domestic stock market is expected to start with an increase of around 0.3%, then digest sell orders ahead of next week’s Federal Open Market Committee (FOMC) meeting, leading to a sector-by-sector market trend.

The U.S. stock market’s early strength, digesting the ECB’s big step and recession concerns, is expected to have a positive impact on the Korean stock market. In particular, technology stocks, which had experienced significant declines, led the rise, suggesting related stocks in the Korean market will show strength. Additionally, the Philadelphia Semiconductor Index continued its upward trend, and considering the economy’s digitalization through Amazon’s acquisition of a telemedicine company, technology stocks are expected to remain strong.

Despite the dollar’s weakness, highlighted by the offshore non-deliverable forward (NDF) won-dollar 1-month rate reaching 1,307.40 won, the possibility of won weakness is a burden. This is presumed to be influenced by recession concerns, which were a factor in the early decline of the U.S. stock market. Furthermore, after the U.S. market closed, most sectors, including semiconductors, experienced profit-taking sell-offs, leading to declines.

Jiyoung Han, Researcher at Kiwoom Securities: "KOSPI is expected to show an upward trend... Earnings announcements should be closely watched."

On the 22nd, the domestic stock market is expected to show an upward trend, supported by the ECB meeting results and Tesla’s sharp rise. Major companies in the automobile, internet, and financial sectors such as Kia, Hyundai Mobis, NAVER, and Hana Financial Group are scheduled to announce earnings, so stock price movements are expected to vary during the session depending on individual earnings issues.

It is important to note that Snap, a U.S. social networking service (SNS) company that announced earnings after the market closed, recorded an earnings shock due to rising costs and advertising slowdown, causing its after-hours stock price to plunge more than 26%. Considering that other growth stocks like Meta and Alphabet also saw declines in after-hours trading, the price volatility of related growth stocks in the domestic market is expected to be relatively high.

The tax reform plan announced by the Ministry of Economy and Finance the previous day includes measures such as a reduction in securities transaction tax, a two-year deferral of financial investment income tax, and easing of major shareholder taxation standards. Given the current high macroeconomic uncertainty and sensitivity to individual earnings issues, this tax reform plan may not immediately serve as a visible positive factor for the stock market. Nevertheless, such market activation measures should be viewed positively as their beneficial effects may become more pronounced toward the end of the year.

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