[Good Morning Market] Recession Warning Amid CPI Slowdown... "KOSPI Expected to Start Lower"

US Stock Market Falls Across the Board Led by Tech Stocks
Domestic Market Focuses on Capital Movement Amid Second Battery Stocks' Outflow

The domestic stock market is expected to start lower on the 13th. The KOSPI is anticipated to open down around 0.3%, with profit-taking selling likely to continue following the previous day.

The New York stock market fell the previous day despite a slowdown in the Consumer Price Index (CPI), as the Federal Open Market Committee (FOMC) minutes included warnings of a potential recession. On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 33,646.50, down 0.11% (38.29 points) from the previous trading day. The large-cap Standard & Poor's (S&P) 500 index fell 0.41% (16.99 points) to 4,091.95, and the tech-heavy Nasdaq index dropped 0.85% (102.54 points) to 11,929.34.

[Image source=Yonhap News]

By sector, among the 11 sectors comprising the S&P 500, telecommunications, technology, and consumer staples stocks declined. The decline in technology stocks was particularly notable. Big tech leaders Apple fell 0.44%, Amazon dropped 2.09%, and Alphabet, Google's parent company, decreased by 0.67%. Electric vehicle maker Tesla fell 3.35%, and Lucid Group plunged 3.90%. Industrial, energy, and materials sectors rose.

The U.S. stock market's weakness during the session due to recession concerns is expected to weigh on the Korean stock market. The fact that semiconductor and electric vehicle sectors, including technology stocks that had seen significant gains, led the decline is likely to dampen investor sentiment toward related stocks in the Korean market.

However, it is positive that, as mentioned in the FOMC minutes, the U.S. recession could proceed moderately, and that former Fed Vice Chair Brainard indicated that U.S. bank withdrawals have returned to average levels, alleviating related concerns.

Sangyoung Seo, a researcher at Mirae Asset Securities, said, "Considering the won's strength due to the weak dollar, attention should be paid to foreign investors' supply and demand," adding, "Since it is an options expiration day, the market direction could change depending on foreign investors' futures trends, which have recently been influencing market direction."

Despite relief from inflation following the U.S. CPI results, the market is likely to experience intraday volatility as it digests external events such as the burden from the FOMC minutes forecasting a recession and internal events like changes in foreign investors' spot and futures supply and demand due to options expiration.

Jiyoung Han, a researcher at Kiwoom Securities, said, "Since both the KOSPI and KOSDAQ have recently shown short-term rallies, there is an increasing desire for profit-taking across the market," adding, "If some outflows occur in the secondary battery sector today, whether those funds will flow into other sectors such as automobiles, biotech, and semiconductors, which have been relatively neglected, will be a key point to watch in the domestic stock market."

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