[Good Morning Market] KOSPI Expected to Start Lower ... Increased Volatility in Export Stocks

On the 14th (local time), pedestrians are passing in front of the New York Stock Exchange in the United States. Photo by AP·Yonhap News

[Asia Economy Reporter Jang Hyowon] On the 16th, the KOSPI is expected to start with a decline of over 1%. The New York stock market fell the previous day due to concerns expressed by central banks of various countries about an economic recession and weak real economy indicators from the US and China.

On the 15th (local time), the Dow Jones Industrial Average closed at 33,202.22, down 764.13 points (2.25%) from the previous session. The Standard & Poor's (S&P) 500 index dropped sharply by 99.57 points (2.49%) to 3,895.75, and the tech-heavy Nasdaq index fell 360.36 points (3.23%) to 10,810.53.

The US Federal Reserve's (Fed) decision to raise the benchmark interest rate by 0.5% at the December Federal Open Market Committee (FOMC) meeting and its upward revision of next year's rate outlook contributed to the stock market decline. Additionally, the European Central Bank's (ECB) 0.5% rate hike also dealt a blow to the market.

Seosangyoung, Researcher at Mirae Asset Securities: “KOSPI to start lower... Decline may narrow if Chinese stock market remains firm”

The previous day, the Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) fell 4.33%, and the MSCI Emerging Markets Index ETF dropped 2.31%. The one-month Non-Deliverable Forward (NDF) USD-KRW exchange rate in New York was 1,318.21 won, reflecting a 14 won increase in the USD-KRW rate at the start.

As the US stock market declined due to weakening real economy indicators following China, it is expected to weigh on the domestic stock market as well. Moreover, the ECB and the Bank of England (BOE) also mentioned concerns about the economy, spreading recession issues further, which could burden foreign investor demand.

However, Chinese Vice Premier Liu He mentioned that new measures to restore market confidence are under consideration, and the risk of delisting for Chinese companies listed in the US has decreased as the US audit oversight panel has gained audit rights, which is positive news.

Also, US Treasury Secretary Janet Yellen met with the Chinese ambassador to the US to discuss global economic development, easing concerns over US-China conflicts. Considering this, the domestic stock market is expected to start with a decline of over 1%, but if the Chinese stock market remains firm, the decline may narrow.

Han Jiyoung, Researcher at Kiwoom Securities: “Stock price volatility in export stocks sensitive to US consumer economy”

The domestic stock market closed lower the previous day, with the KOSPI down 1.5% and the KOSDAQ down 0.9%, influenced by the hawkish (tightening preference) December FOMC results, shocks from real economy indicators such as Chinese industrial production and retail sales, and volatility in foreign and institutional investor demand.

On the 16th, a rebound is expected mainly in growth and financial stocks that experienced large declines, but bearish pressure is likely to remain strong due to the aftereffects of the December FOMC, weak US real economy indicators, and shocks from the December ECB meeting.

From an industry perspective, considering that consumer goods and durable goods stocks showed weakness in the US stock market due to slowing US consumer indicators and real demand concerns, it is necessary to prepare for increased stock price volatility in export stocks sensitive to the US consumer economy in the domestic market as well.

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