In contrast to the volatility in the New York stock market due to reduced expectations of a September interest rate cut in the U.S. and increased caution ahead of the Jackson Hole meeting, domestic stock markets showed an upward trend early in the session on the 22nd. Amid recent adjustments, strong buying from investors is anticipated in sectors expected to benefit from the upcoming South Korea-U.S. summit.
The KOSPI index stood at 3178.18 at 9:06 a.m. that day, up by 36.44 points (1.16%) from the previous day. At the same time, the KOSDAQ index recorded 783.55, up by 6.31 points (0.81%).
Samsung Electronics, SK hynix, LG Energy Solution, and all other top 10 companies by market capitalization in the KOSPI market are showing higher stock prices compared to the previous day.
In the KOSDAQ market, while Ecopro BM and Ecopro are slightly lower, companies like Alteogen, PharmaResearch, HLB, and LigaChem Biosciences are showing upward trends.
By sector, the rise in industries that have struggled recently, such as defense, non-ferrous metals, power equipment, holding companies, insurance, and healthcare, has been notable. Additionally, sectors that are expected to benefit from cooperation between Korea and the U.S., such as shipbuilding and nuclear power, are also on the rise.
Overnight, major stock indices in the U.S. showed weakness, with the Dow Jones Industrial Average down 0.34%, the Nasdaq Composite down 0.34%, and the Standard and Poor's (S&P) 500 down 0.4%. This was heavily influenced by responses from Federal Reserve chairpersons expressing skepticism towards rate cuts surrounding the Jackson Hole meeting that began in Wyoming.
Participants in the U.S. federal funds futures market are reflecting a 75% probability of a rate cut at the September Federal Open Market Committee (FOMC) meeting, according to the Chicago Mercantile Exchange (CME) FedWatch Tool. Just a week ago, the probability was above 90%.
Jerome Powell, chair of the U.S. Federal Reserve, is set to deliver a speech at the Jackson Hole meeting tonight, Korean time. As this is the last Jackson Hole meeting during Powell's term, the market may experience volatility again depending on the messages he conveys regarding currency policy directions.
The exchange rate of the won against the U.S. dollar is approaching the 1400 won mark again, which could pose a hurdle for foreign capital inflow. Based on KOSPI market data, the net buying amount of foreign investors increased from 1.1 trillion won in May to 2.7 trillion won in June and 6.3 trillion won in July, but has turned to a net selling of 600 billion won this month.
Lee Seong-hoon, a researcher at Kiwoom Securities, noted, "Considering that the absolute scale of foreign capital net selling is not that large, it seems that investors are maintaining a wait-and-see attitude. However, unless policymakers express a forward-looking stance, it is expected that the inflow of foreign capital will be limited, leading to a box range market trend for a short time."