On the 6th of this month, the Korea Composite Stock Price Index (KOSPI) had to close the week at 2428.16 amid the aftermath of martial law, but it ended at 2494.46 on the 13th, successfully rising compared to the previous week. The start on the 9th suggested a drop of nearly 3%, indicating continued repercussions from the emergency martial law situation; however, it rose for four consecutive trading days, comforting anxious investors. The KOSDAQ also rose for four consecutive days, nearing the 700-point mark. The market last week was filled with expectations that political uncertainty would ease ahead of the second impeachment motion vote on the 14th.
The impeachment motion against President Yoon Seok-yeol was passed as expected by the market. The voting results for the impeachment motion were announced on the 14th at 4 p.m. at the National Assembly in Yeouido, Seoul, with 204 votes in favor, 85 against, 3 abstentions, and 8 invalid votes out of 300 seated members. According to the National Assembly Act, once the National Assembly votes on an impeachment motion, the Speaker of the National Assembly must immediately send the original motion to the Chairperson of the Legislative and Judiciary Committee.
The Constitutional Court must decide on the impeachment of President Yoon within 180 days, by June of next year. According to regulations, a majority of 6 out of 9 Constitutional Court judges must agree for the impeachment to be finalized. However, the Constitutional Court currently has only 6 judges. Acting Chief Justice Moon Hyung-bae noted that they would discuss whether a decision on the impeachment is possible with this 6-member panel.
Although the voting on the impeachment motion has ended, there is still time for the Constitutional Court, and thus political uncertainty has not been completely resolved. As a result, the stock market sentiment this week is expected to be partially influenced by the impeachment turmoil. However, securities experts advise that there is no need to be overly sensitive. Research Institute analyst Na Jung-hwan stated, "If we look solely at past cases, the impact of political uncertainty on stock prices is often short-term. The driving direction of medium to long-term stock prices is more affected by global economic movements."
This week, multiple events will take place to assess global economic trends and gauge future movements. A key event is the announcement regarding the U.S. Federal Open Market Committee (FOMC) results to be released on the 19th, Korean time. Last month, the U.S. Consumer Price Index (CPI) rose by 2.7% compared to the same month last year. Given that the figures matched market expectations, anticipation for a rate cut in December has significantly increased.
However, the U.S. Consumer Sentiment Index and Employment Trends Index are maintaining a solid trend. Research Institute analyst Na noted, "Considering that the U.S. economy remains robust, it is difficult to rule out the possibility that the Federal Reserve may adjust its interest rate forecast upward by the end of 2025."
According to the Federal Reserve's FedWatch tool by CME Group, the probability that the benchmark interest rate will end at 4.0% by the end of next year is 71%, the highest. This implies that a total reduction of 50 basis points (1 basis point = 0.01 percentage points) has been factored in, consisting of two 25 basis point cuts. Additionally, considering the tariff policy direction of the second Trump administration, the strength of U.S. monetary policy easing next year may be weaker than market expectations. This suggests that the growth stock's upward potential may slow.
Research Institute analyst Min Byung-kyu stated, "The delay of disinflation in major global countries is commonly observed," adding that "the items driving the rise in CPI differ by country, but a common denominator is energy prices."
On the 16th (Korean time), investors should pay attention to several key events, including the U.S. December S&P Global Manufacturing and Services PMI, China's November industrial production and retail sales, the U.S. November industrial production and retail sales on the 17th, the revision of the European November Consumer Price Index on the 18th, and the U.S. 3rd quarter GDP confirmation and December Philadelphia manufacturing index on the 19th, as well as the U.S. November PCE prices and end of the government budget approval on the 20th.
Shinhan Investment Corporation suggested a KOSPI index band of 2300 to 2600 points for December. Research Institute analyst Roh Dong-gil noted, "If domestic political risks do not escalate dramatically, the impact will concentrate on sectors," recommending industries such as shipbuilding, media, telecommunications, and software, which have high margin protection, as well as high dividend stocks.