[Good Morning Stock Market] Foreigners' Massive Purchase of Samsung Electronics... Will It Drive the Market Up?

[Image source=Reuters Yonhap News]

Last night, the New York stock market opened higher due to a rebound in buying interest and showed volatility during the session, with all three major indices closing higher. In particular, as the dollar weakened for six consecutive days amid growing expectations that the Federal Reserve (Fed) may end its rate hike cycle and due to the Bank of England (BOE) monetary policy, tech stocks led the gains, with the Nasdaq surging as much as 2.5% at one point. However, the dollar turned strong again, and selling pressure emerged due to a sharp drop in regional banks, erasing the gains. The Dow Jones Industrial Average rose 0.23%, the Nasdaq 1.01%, and the Standard & Poor's (S&P) 500 index closed up 0.30%.

The high volatility in the New York stock market is also a burden for our market. This could increase recession risks, which is expected to have a negative impact on our export-dependent market. However, the rise in Nvidia, the increase in Micron on hopes of a semiconductor industry bottom, and the Philadelphia Semiconductor Index rising 2.67% are positive factors for our market.

Seosangyoung, Head of Mirae Asset Securities “KOSPI to start flat, then shift to stock-specific market”

[Image source=EPA Yonhap News]

Our market is expected to start flat and then, after digesting major issues and ahead of the Q1 earnings announcements in April, shift focus from indices to individual stocks, leading to a stock-specific market.

Yesterday, despite the emphasis on the Fed nearing the end of its rate hike cycle, the U.S. market opened lower due to the impact of Treasury Secretary Janet Yellen’s statement that there had been no discussion of comprehensive deposit protection. However, expectations of the end of the rate hike cycle led to a weaker dollar, causing the won-dollar exchange rate to plunge by 29.4 won, strengthening the won and prompting foreign investors to continue net buying in both spot and futures markets. The KOSPI rose 0.31%, mainly driven by the semiconductor sector. However, the KOSDAQ fell 0.15% as volatility increased ahead of the close in the secondary battery sector.

Although concerns about U.S. regional banks remain, the risk of contagion has been contained thanks to statements from Fed Chair Jerome Powell and Secretary Yellen emphasizing the soundness of the banking system, which is favorable.

Han Jiyoung, Kiwoom Securities Analyst “Need to watch if the sell-off in the secondary battery sector continues”

[Image source=Reuters Yonhap News]

Today, expectations for the end of the base interest rate hike cycle and easing of interest rate burdens are expected to positively influence domestic growth stocks, driven by the strong performance of the U.S. communication and IT sectors. Compared to the S&P 500, the domestic market is showing a robust trend centered on growth stocks, influenced more by easing interest rate burdens despite lingering concerns over SVB-related banking sector instability. The won-dollar exchange rate recorded around 1,278 won, and the fact that it fell below 1,300 won amid perceptions that the previous depreciation was excessive is also positive. Foreign investors, who have net sold nearly 7 trillion won since March, have recently shown net buying centered on large-cap stocks and the electrical and electronics sector, especially Samsung Electronics, for two consecutive days. This is interpreted as a relief compared to market concerns after the detailed contents of the U.S. Semiconductor Act were disclosed, attracting foreign buying into the electrical and electronics sector. As the Q1 earnings season approaches, whether the semiconductor sector rebounds will likely determine the upper range of the index.

Just before the market close yesterday, a large-scale profit-taking in the secondary battery sector led the KOSDAQ index, which had been up over 1%, to decline. Considering that U.S. futures indices remained steady at the same time, the increased volatility in the afternoon session is estimated to be due to the secondary battery sector rather than external factors. Since there were some signs of overheating in the secondary battery sector, whether the sell-off continues today and where liquidity will flow next will likely determine the leading stocks next week.

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