[Market ING] KOSPI Engulfed by Political Uncertainty

Weekly KOSPI Expected Band 2420~2550 Range

As political uncertainty expands, stock market volatility is also increasing. The KOSPI fell to the 2420 level last week. The icy market conditions are expected to continue this week (December 9-13). Opinions suggest refraining from new actions for the time being.

Yonhap News

Last week, the KOSPI fell by 1.13%, and the KOSDAQ by 2.49%. Lee Kyung-min, a researcher at Daishin Securities, stated, "Although the martial law situation, which occurred for the first time in over 40 years, was resolved quickly by the National Assembly's prompt response, aftershocks are ongoing during the recovery process." He explained, "Political variables still dominate the domestic financial market. In this process, the KOSPI weakly gave up the 2450 level it had maintained, and until a short-term recovery and stabilization between 2450 and 2500 is confirmed, it is necessary to refrain from new actions." He added, "I think reducing the current stock holdings or chasing sales has no practical benefit, but actively investing at the current index level may be difficult due to the challenging process of confirming the bottom. If preparing for new investments, it would be advantageous to buy in installments below the 2400 level when volatility expands."

With the impeachment motion against President Yoon Seok-yeol failing due to insufficient votes, the political uncertainty that has engulfed the stock market is expected to continue. Kim Young-hwan, a researcher at NH Investment & Securities, said, "(With the impeachment motion's failure) political turmoil continues, and stock market volatility may persist." NH Investment & Securities projected the KOSPI range for this week to be between 2420 and 2550.

Kang Hyun-ki, a researcher at DB Financial Investment, said, "The stock market inherently dislikes uncertainty. When the future is unclear, poor stock performance is inevitable." He added, "There is considerable uncertainty not only due to recent political issues in Korea but also in terms of the external environment. Accordingly, an expansion of volatility in the Korean stock market is unavoidable for a certain period." He further noted, "This may continue for several months."

There are also opinions emphasizing a greater focus on fundamentals. Labor Gil, a researcher at Shinhan Investment Corp., analyzed, "The KOSPI will enter a period of uncertainty such as policy gaps, but considering that extreme volatility was absent during past presidential impeachment votes and that the foreign exchange market is currently stabilizing, the speed of decline is expected to slow." He added, "A more important variable is fundamentals; improvements in U.S. manufacturing conditions and continued expectations for Chinese policies may act as upward pressure on the index."

Key schedules for this week include China's November Consumer Price Index (CPI) and Producer Price Index (PPI) on the 9th, China's November export and import data on the 10th, U.S. November CPI on the 11th, and U.S. November PPI on the 12th.

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