[Good Morning Stock Market] Nasdaq Rises... Kospi Expected to Start Higher

On the 11th, the KOSPI is expected to start with a rise of around 0.3%, supported by the strong performance of the US Nasdaq the previous day.

On the 10th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 33,531.33, down 30.48 points (0.09%) from the previous session. The Standard & Poor's (S&P) 500 index rose 18.47 points (0.45%) to 4,137.64, and the Nasdaq index closed up 126.89 points (1.04%) at 12,306.44.

[Image source=Yonhap News]

The New York stock market started strong as a favorable Consumer Price Index (CPI) report caused a sharp drop in Treasury yields, leading gains in technology stocks and regional bank shares. The US Department of Labor announced that the April CPI rose 4.9% compared to the same month last year, below the 5.0% increase forecasted by economists surveyed by The Wall Street Journal (WSJ) and the previous month's figure. This marks the lowest inflation rate in two years since April 2021.

However, news of decreased consumer spending sparked concerns about a recession, raising worries over banks' earnings due to increased loan loss provisions, causing bank stocks to turn downward and the market to show mixed trends. Nevertheless, Alphabet surged after announcing AI-related developments at its developer conference, and Amazon also showed strength, helping the Nasdaq close higher.

The Morgan Stanley Capital International (MSCI) Korea Index Exchange-Traded Fund (ETF) rose 0.13% the previous day, while the MSCI Emerging Markets Index ETF fell 0.05%. Considering this, the KOSPI is expected to start with a rise of around 0.3%.

Seosangyoung, a researcher at Mirae Asset Securities, explained, "The strong late-session surge in Nasdaq driven by Alphabet's rally in the US stock market will have a positive impact on the domestic market. The progress in US inflation stabilization, which had been a burden on the domestic market, is also positive for overall investor sentiment." He added, "Concerns over slowing US consumer spending remain, posing risks of economic contraction, and political uncertainties surrounding the US debt ceiling negotiations are also burdensome. However, the weakening of the US dollar amid inflation stabilization and the significant drop in the won-dollar exchange rate will positively affect foreign investor flows due to the won's strength."

Han Ji-young, a researcher at Kiwoom Securities, forecasted, "Although volatility in foreign and institutional investors' spot and futures supply and demand may occur due to options expiration, the market is expected to rise supported by Nasdaq's strength and the offshore won-dollar exchange rate's sharp decline." She added, "The simultaneous strength of US AI-related stocks will positively influence the investment sentiment of domestic AI-related stocks and overall growth stocks."

Meanwhile, the New York Non-Deliverable Forward (NDF) 1-month won-dollar exchange rate stood at 1,316.15 won, reflecting an expected 10 won decline in the won-dollar exchange rate at the start of the day.

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