[Good Morning Stock Market] US Semiconductor and Financial Stocks Rally... KOSPI Expected to Start Higher

[Asia Economy Reporter Son Sun-hee] The U.S. stock market closed slightly higher, led by gains in the semiconductor sector as well as financial and automotive stocks. This is expected to have a positive impact on the Korean stock market on the 5th, with the KOSPI anticipated to start up around 0.5%.

On the 4th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,269.77, up 133.40 points (0.40%) from the previous session. The Standard & Poor's (S&P) 500 index rose 28.83 points (0.75%) to 3,852.97, and the Nasdaq index closed at 10,458.76, up 71.78 points (0.69%).

Tesla's stock rebounded 5.12% after having plunged more than 10% the previous day, and Apple's stock also rose 1.05%. Semiconductor stocks such as Nvidia (+3%), Intel (+3.6%), and Micron (+7.6%) showed strength. Chinese companies’ American Depositary Receipts (ADRs) also posted double-digit gains, with Baidu (+10.6%) and JD.com (+14.7%) rising following news that Ant Group received approval for its capital raising plan.

However, volatility remained as the market turned lower during the session after Neel Kashkari, president of the Minneapolis Federal Reserve Bank and considered a 'hawk' at the Federal Open Market Committee (FOMC), argued online that the U.S. benchmark interest rate should be raised to around 5.4%. The current U.S. benchmark interest rate stands at 4.25?4.50%.

The Korean stock market rose the previous day, buoyed by the narrowing losses in the U.S. market, and showed a sharp rally centered on the semiconductor sector. The KOSPI closed up 1.68%, and the KOSDAQ rose 1.29%. Seo Sang-young, head of the Media Content Division at Mirae Asset Securities, analyzed, "The expansion of the semiconductor investment tax credit rate, the Chinese government's suspension of subsidies to semiconductor companies, and expectations of Samsung Electronics revising its semiconductor supply policy have likely fueled optimism about the sector bottoming out, leading to strength. The construction sector also rose on expectations of lifting real estate regulation zones, with positive factors driving gains in these sectors." He added that the inflow of foreign buying focused on the semiconductor sector was also a positive factor.

The Korean stock market is also expected to start higher today. Seo said, "The strength in the U.S. market during the session, led by semiconductors, financials, and automotive sectors, is expected to have a positive impact on the Korean stock market. In particular, ongoing optimism about the Chinese government's easing of big tech regulations has led related stocks to rally sharply, contributing to an overall improvement in investor sentiment, which is also favorable."

However, concerns remain as the ISM manufacturing index, a leading indicator of Korean exports, still lags below the baseline, and the cooling U.S. labor market could raise fears of economic slowdown and continued export weakness. The sharp drop in international oil prices is also fueling concerns about economic deceleration.

Nonetheless, Seo predicted, "Considering the rebound driven by a weaker dollar and falling interest rates, the Korean stock market is expected to start up around 0.5% and maintain strength throughout the day."

Meanwhile, the minutes of the U.S. FOMC meeting released on the same day revealed discussions that "it is not appropriate to start cutting rates this year." This is interpreted as meaning that the Fed, which is raising rates to achieve 'price stability,' is very unlikely to change its policy stance within the year.

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