[Good Morning Stock Market] "Korean Stock Market Expected to Start Higher... Sectoral Differentiation Likely to Proceed"

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] The Korean stock market is expected to start higher on the 29th. This is likely influenced by the U.S. stock market closing higher on the 28th (local time) despite the preliminary Q2 economic growth rate recording a -0.9% quarter-on-quarter decline. After the GDP announcement, the focus shifted to the possibility of a smaller rate hike in September, and in the late session, Treasury Secretary Yellen expressed confidence in the economy, which expanded the gains. The U.S. Congress passing a semiconductor industry promotion bill also had a positive impact.

On the previous day, the Dow Jones Industrial Average closed at 32,529.63, up 332.04 points (1.03%) from the previous session. The large-cap focused S&P 500 index rose 48.82 points (1.21%) to 4,072.43, and the tech-heavy Nasdaq index closed up 130.17 points (1.08%) at 12,162.59.

Seo Sang-young, Head of Mirae Asset Securities Division: "Starting with around 0.5% rise... Sector differentiation will proceed"

[Image source=Yonhap News]

Seo Sang-young, Head of Mirae Asset Securities Division, evaluated positively the U.S. stock market's rise despite the negative Q2 GDP figure, regarding it as favorable for the Korean stock market on the 29th. Seo said, "The Korean stock market is expected to start with about a 0.5% rise, followed by sector differentiation."

Seo added, "The MSCI Korea Index ETF rose 1.14%, the MSCI Emerging Markets Index ETF increased by 0.43%, and the 1-month NDF (New York Non-Deliverable Forward) USD/KRW exchange rate was at 1,296.35 won. Reflecting this, the exchange rate is expected to start steady."

He continued, "Eurex KOSPI200 futures rose 0.43%, and the KOSPI is expected to start higher by around 0.5%."

Seo also noted, "However, despite the expressed confidence in the U.S. economy, the ongoing economic slowdown remains a burden. This could increase the possibility of won depreciation, which may negatively affect foreign investor demand."

After the U.S. market close, Amazon posted strong sales, rising over 12% in after-hours trading, and Apple also rose over 3% after its earnings announcement, which is positive. However, Intel showed weak earnings due to a slowdown in major sales, resulting in a sharp drop of over 9%, which is seen as a burden.

Han Ji-young, Kiwoom Securities Researcher: "Expected Strength Supported by Domestic Earnings Season"

Han Ji-young, a researcher at Kiwoom Securities, also stated, "Amid relief from the FOMC and the fact that recession is becoming a given, the U.S. stock market rebound and the well-progressing Q2 domestic earnings season are expected to support strength."

Han explained, "Additionally, after market close, Apple (+0.4%) posted an earnings surprise with strong iPhone sales, showing a 3% gain in after-hours trading, and Amazon (+1.1%) also surged over 11% after hours due to an earnings surprise driven by strong core businesses including cloud services. This is expected to improve investment sentiment for domestic semiconductor, IT hardware, and growth stocks."

However, Han expressed concern that Intel (-1.1%) issued a negative guidance due to a sharp drop in PC demand, causing an over 8% plunge in after-hours trading, which could limit the upside of related IT stocks. Han concluded, "Overall market conditions will be favorable, but stock price movements will show varying upward momentum depending on individual earnings issues."

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