[Good Morning Stock Market] Mixed Trends Amid Tightening Concerns... "KOSPI Expected to Start Flat"

On the 11th, the domestic stock market is expected to start in a narrow range and then go through a process of absorbing sell orders. Volatility is anticipated depending on the actions of foreign investors.

The previous day, the New York stock market closed mixed amid expectations of additional tightening by the U.S. Federal Reserve (Fed). On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average, which focuses on blue-chip stocks, closed at 33,586.52, up 0.30% (101.23 points) from the previous trading day. The large-cap focused Standard & Poor's (S&P) 500 index rose 0.10% (4.09 points) to close at 4,109.11, but the tech-heavy Nasdaq index ended trading down 0.03% (3.60 points) at 12,084.36.

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Within the S&P 500, industrials, energy, materials, and real estate stocks rose, while telecommunications, utilities, technology, and healthcare stocks declined. Apple’s stock fell 1.60% as first-quarter personal computer (PC) shipments plunged more than 40% compared to the same period last year.

Notably, although the Nasdaq fell nearly 1.4% due to weakness in large tech stocks, it narrowed its losses to close down just 0.03% after absorbing sell orders, which is expected to have a favorable impact on the domestic stock market. The narrowing of losses by large tech stocks and Tesla, which led the early session decline, is also positive.

The Philadelphia Semiconductor Index rose 1.80%, but since the semiconductor sector’s strength has already been priced in, the impact is expected to be limited. Rather, factors such as TSMC’s sales slowdown in March and a 29% year-on-year drop in first-quarter PC shipments are likely to weigh on continued gains.

Seosangyoung, a researcher at Mirae Asset Securities, said, “While expectations for a bottom in the semiconductor industry are growing, the subsequent figures have been weaker than expected, suggesting a process of absorbing sell orders in related stocks, which is a burden on the Korean stock market.” He added, “Considering this, the domestic market is expected to start in a narrow range and then show changes depending on the actions of foreign investors, continuing from the previous day.”

The previous day, the domestic stock market closed higher, supported by foreign investors’ net buying of around 700 billion KRW in the KOSPI, and the strength of leading sectors within both markets due to individual positive factors such as Samsung Electronics and EcoPro BM.

Today, despite a rebound in the U.S. stock market after midday and positive momentum from the Philadelphia Semiconductor Index (+1.8%) including Micron (+8.0%), the market is expected to show limited price movement as it absorbs profit-taking following a short-term surge since last week.

Han Ji-young, a researcher at Kiwoom Securities, said, “Due to recent price increases, the KOSPI is once again approaching the breakthrough of the 200-week moving average (around 2,526 points), which is a medium- to long-term trend line.” She added, “During the attempt to break through the 200-week moving average, technical selling and trading battles may occur, so it is necessary to be cautious of increased price volatility near this level.”

Han also noted, “During the session, it will be important to watch whether the market’s demand concentration on secondary battery stocks such as EcoPro BM and EcoPro, which surged sharply the previous day, continues, as well as changes in the exchange rate following the Bank of Korea’s Monetary Policy Committee meeting, where a rate freeze is the consensus.”

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