[Good Morning Stock Market] "Concerns Over Weak July Exports and Imports... KOSPI Expected to Start Lower"

Focus on China's Caixin PMI Indicator... Slight Slowdown Expected
Australia's Benchmark Interest Rate Expected to Rise by 25bp

[Image source=Yonhap News]

The Korean stock market is expected to start lower on the 1st. Concerns over sluggish exports and imports in Korea for July are mounting, with China's Caixin Manufacturing PMI and Australia's monetary policy meeting expected to act as variables.

On the previous day (local time), the Dow Jones Industrial Average closed at 35,559.53, up 100.24 points (0.28%) from the previous session. The S&P 500, centered on large-cap stocks, ended at 4,588.96, up 6.73 points (0.15%), while the tech-heavy Nasdaq closed at 14,346.02, rising 29.37 points (0.21%).

The U.S. stock market started higher ahead of key economic indicators and earnings announcements at the end and beginning of the month but showed fluctuations around the flat line. The market is focusing on the slowdown in inflation and a soft landing scenario for the economy, maintaining buying momentum. However, there is also a notable desire for profit-taking. The limited fluctuations and sensitivity to individual stock issues suggest a stock market environment with mixed movements around the flat line.

Mirae Asset Securities expects that the Korean stock market will also experience differentiation among stocks during the process of absorbing sell-offs. In particular, fluctuations are expected to be centered on small- and mid-cap stocks. This is because, in the U.S. market, AI-related stocks have shown strength, and the rise of small-cap stocks is evident, with the Russell 2000 index increasing by 1.09%.

The market is paying close attention to Korea's export and import statistics for July. In June, exports and imports decreased by 6.0% year-on-year, showing some improvement, but a sharp 15% decline is expected in July. Imports are expected to decrease more significantly, maintaining the trade surplus trend. However, since both exports and imports have significantly slowed, resulting in a recession-type surplus, this poses a burden on the stock market. This could weigh on corporate earnings going forward.

China's Manufacturing Purchasing Managers' Index (PMI) may also have an impact. The PMI is an indicator showing companies' economic outlook. There are official figures released by the government and figures published by economic media. The National Bureau of Statistics of China announced on the 31st the official PMI for manufacturing and non-manufacturing (services and construction), while the economic media Caixin will release its figures separately on the 1st.

Although the National Bureau of Statistics stated that China's manufacturing PMI slightly improved yesterday, the Caixin manufacturing PMI to be announced today is expected to show a slight slowdown. Depending on the results, a reversal of the previous day's rise in Chinese stock prices may occur.

Additionally, Australia's monetary policy meeting is attracting attention. The market expects Australia to raise its benchmark interest rate by 25 basis points (1bp = 0.01 percentage points). If a hawkish stance is announced, changes in the stock market due to increased volatility in the foreign exchange market could be significant.

Seo Sang-young, head of media content at Mirae Asset Securities, stated, "Considering domestic and international variables, the Korean stock market is expected to start down about 0.3%, with volatility increasing depending on economic indicators such as exports and imports and the outcome of Australia's monetary policy."

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