[Good Morning Stock Market] US Investment Sentiment Improves... 3 Major Indexes Close Higher

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jaehee] The U.S. stock market started higher the previous day as Nike (12.18%) surged following a solid earnings report. The Dow Jones 30 Index closed up 1.60%, the Nasdaq rose 1.54%, and the Standard & Poor's (S&P) 500 Index increased by 1.49%.

In addition to Nike, Lululemon (3.13%) and Under Armour (4.48%) also rose together, while Qualcomm (2.22%), AMD (4.04%), Nvidia (2.59%), and Broadcom (3.16%) showed strength after Bernstein selected them as top semiconductor picks. Apple (2.38%) rose as expectations for increased sales to China grew following Nike's earnings announcement.

The U.S. stock market's rise due to easing recession concerns is expected to have a positive impact on the Korean stock market. Furthermore, Nike's sharp rise after reporting stronger-than-expected earnings and guidance during a season previously expected to be subdued is also anticipated to improve overall investor sentiment. Additionally, the Philadelphia Semiconductor Index rose 2.36%, and although Micron (1.01%) reported disappointing earnings after the market close, the CEO mentioned that strong profitability can be achieved after this downturn, showing resilience, which is also favorable.

Seo Sangyoung, Head of Media Content Division at Mirae Asset Securities: "Easing of U.S. recession concerns is favorable... KOSPI expected to start up around 0.5%"

On the 22nd, the Korean stock market is expected to start up around 0.5% and maintain a solid performance.

The previous day, the Korean market showed strength as the U.S. market rose on rebound buying. Additionally, early in the session, the Japanese market turned positive despite the shock from the Bank of Japan (BOJ), showing favorable surrounding market conditions and solid performance. However, Goldman Sachs expressed concerns over Samsung Electronics' earnings, causing related stocks to turn down, and foreign investors' selling pressure on large-cap stocks also weighed on the market. As a result, the KOSPI closed down 0.19%, while the KOSDAQ rose 0.37% due to rebound buying.

Meanwhile, the U.S. market's rise, supported by improved consumer confidence and easing recession concerns, is expected to positively influence the Korean market. Moreover, Nike's stronger-than-expected earnings and guidance during a season previously forecasted to be weak is likely to improve overall investor sentiment.

Furthermore, despite Micron (1.01%) reporting earnings below expectations after the close while the Philadelphia Semiconductor Index rose 2.36%, the CEO's comments about achieving strong profitability after this downturn also present a favorable outlook.

In addition, inflows of program buying by institutional investors for dividends and expectations of foreign investors' improved supply-demand dynamics amid confidence in the economy and anticipated won appreciation are also expected to have a positive effect.

Kim Jihyun, Researcher at Kiwoom Securities: "KOSPI attempts rebound supported by improved U.S. investor sentiment"

The KOSPI started higher the previous day due to bargain hunting amid perceptions of excessive declines, but total trading volume sharply dropped to around 9 trillion won. Particularly, the semiconductor export slump led to declines centered on the electrical and electronics sector and large-cap stocks. Today, the market is expected to attempt a rebound supported by improved investor sentiment in the U.S. market and Micron's earnings report that met expectations.

Samsung Electronics and SK Hynix are showing weak stock performance due to short-term momentum absence caused by recession and weak demand, and with 2023 earnings estimates being revised downward, further declines are expected to be limited.

Despite a sharp drop in December trading volume, sectors showing cumulative net buying by foreigners include finance, insurance, steel and metals, and machinery sectors, while on the KOSDAQ, entertainment and digital content sectors were identified. This is judged to reflect dividend stock strength due to rising year-end dividend appeal and stock gains benefiting from China's economic recovery. Although the recovery in China's mobility is slow, the government has expressed willingness to stimulate the economy and set a 5%+ economic growth target for next year, indicating that the reopening trend remains valid. Therefore, a rotation among related stocks is expected to continue.

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