[Market ING] Ongoing Volatility Unavoidable for Now...Focus on FOMC, GTC, and More

Weekly KOSPI Expected to Trade Between 5,300 and 5,900 Points

Due to ongoing uncertainty stemming from the Middle East, the KOSPI continued its downward trend for the second consecutive week. This week, attention is focused on the upcoming March Federal Open Market Committee (FOMC) meeting in the United States and Micron's earnings announcement. The market is watching to see whether this focus on geopolitical issues will shift toward macroeconomic factors and corporate earnings.

Yonhap News

Last week, the KOSPI fell by 1.75%, while the KOSDAQ declined by 0.15%. The indices fluctuated in response to the ongoing war in the Middle East and oil price volatility, dropping to the 5,200 level before briefly recovering to the 5,600 range, ultimately ending the week in the 5,400 range. Paek Jongmin, a researcher at Samsung Securities, stated, "While market volatility has increased, there is no clear direction at present. The global financial market is reacting in real time to geopolitical issues arising from the Middle East, and the Korean stock market is experiencing extreme fluctuations, especially in line with sharp swings in oil prices."

Analysts believe that market volatility will be inevitable for the time being. Paek explained, "It seems inevitable that high volatility will continue for now. Although U.S. President Donald Trump has hinted at a rapid end to the conflict with Iran, Iran maintains a hardline stance." He added, "The actual condition for ending this crisis will ultimately be the guarantee of smooth passage through the Strait of Hormuz. Even if a short-term declaration of the end of the war is made, geopolitical instability in the Middle East will persist until the oil market stabilizes." He further noted, "As the KOSPI is highly sensitive to external factors, it will be difficult for the market to establish a clear direction in the near term."

This week, the March FOMC meeting in the United States is scheduled to take place. Lee Kyungmin, a researcher at Daishin Securities, stated, "It is already a foregone conclusion that the FOMC will keep the benchmark interest rate unchanged, so the market's attention will be on updates to the Summary of Economic Projections (SEP) and changes in the dot plot." He continued, "A key challenge will be resolving the dilemma of stagflation. Nonfarm employment in February saw an unexpectedly sharp decline, and concerns are growing over the impact that rising oil prices, resulting from the war, may have on future inflation."

With ongoing concerns about inflation, it will be important to monitor price indicators. On March 13 (local time), the U.S. Department of Commerce announced that the Personal Consumption Expenditures (PCE) price index for January rose 2.8% year-on-year. This was lower than the 2.9% consensus forecast compiled by Dow Jones, and up 0.3% from the previous month, which was in line with expectations. Excluding energy and food, the core PCE price index increased 3.1% year-on-year and 0.4% month-on-month, also matching forecasts. On March 18, the U.S. Producer Price Index (PPI) for February will be released. Lee noted, "January's PPI already exceeded expectations, and if the PPI remains high even without reflecting oil price effects, a subsequent pass-through to consumer prices will be unavoidable. As the release of inflation data approaches, market caution may rise." He added, "However, if the Federal Reserve interprets this as a temporary factor, it could ease market anxiety."

There are also expectations that the domestic stock market's momentum will be confirmed through events such as Nvidia's annual technology conference, GTC 2026. Lee Sangjun, a researcher at NH Investment & Securities, commented, "Although the market is exposed to high volatility due to geopolitical risks, this week's scheduled events will reaffirm the momentum for the Korean market, including the benefits of AI infrastructure investments and improvements in governance." He continued, "On March 18, Micron's earnings announcement, which is expected to confirm strong memory demand, is also scheduled. Any market correction can be seen as an opportunity to increase exposure to leading sectors such as semiconductors, electricity, securities, and holding companies." NH Investment & Securities projected the KOSPI's expected trading band for this week to be between 5,300 and 5,900.

This week's major events include the March New York Federal Reserve Bank Manufacturing Index and February Industrial Production in the United States, as well as February Retail Sales, Industrial Production, and Fixed Asset Investment in China, all scheduled for March 16. On March 17, the U.S. Conference Board Leading Economic Index for February will be released. On March 19, the March FOMC, the March European Central Bank (ECB) monetary policy meeting, and the March Bank of Japan (BOJ) monetary policy meeting are all scheduled. From March 16 to 19, the GTC 2026 will also be held.

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