Last week, the domestic stock market showed heightened caution as significant issues such as the U.S.-South Korea summit, the Jackson Hole meeting, and NVIDIA's earnings announcement unfolded. The KOSPI index started at 3168.73 points and briefly surpassed the 3200 mark before closing at 3186.01 points during the week of Aug. 25-29. The KOSPI and KOSDAQ indexes increased by 0.55% and 1.84%, respectively, during this period.
As profit-taking transactions surged amidst the sideways movement of the domestic stock market following the rally that began in June, this week (Sept. 1-5) is expected to be influenced by policy expectations tied to the start of the regular National Assembly and the release of U.S. economic indicators.
During the regular National Assembly starting on the first day of September, discussions are expected on the third revision of the Commercial Act, which contains mandatory provisions for the cancellation of treasury stocks. The second revision of the Commercial Act, which includes the mandatory application of voting concentration for listed companies with assets exceeding 2 trillion won and the expansion of separate elections for Commissioners, has already passed the National Assembly.
Additionally, the introduction bill for the Business Development Company (BDC), a promise of the new government, has already passed the general meeting. In September, as policies promoted by the government become more visible, they could serve as a driving force for the stock market's rise.
There is also a strong possibility that the revision of the transfer income tax standard for major shareholders (from 5 billion won to 1 billion won) will be settled in September. Lee So-young, a member of the Democratic Party of Korea, noted, "While it is understandable that the government must be cautious compared to the party, if we reach the latter part of September and decide to maintain the 5 billion won standard, it will not be welcomed by investors."
Investors should also pay attention to major economic indicators announced in succession in the United States. On the 5th, the employment report will be released, and on the 11th, the Consumer Price Index (CPI) for August will be made public.
These indicators are expected to significantly influence whether the U.S. Central Bank, the Federal Reserve, will resume interest rate cuts at the Federal Open Market Committee (FOMC) meeting on the 16th. According to the Chicago Mercantile Exchange (CME) FedWatch Tool, as of the 29th, the federal funds futures market is pricing in an 85.1% probability of a 25 basis point (1 basis point = 0.01%) cut in the benchmark interest rate in September.
Na Jeong-hwan, a researcher at NH Investment & Securities, stated, "Considering that employment is typically weak in July and August, there is a possibility that employment data will be collected in favor of supporting interest rate cuts," and added, "In the second half of the year, attention should be directed towards growth stocks such as artificial intelligence (AI) software and biotechnology, driven by the expectation of the Federal Reserve's interest rate cuts."
NH Investment & Securities expects the KOSPI index to move within the range of 3000 to 3300 points this week. Na remarked, "If discussions on the policies mentioned as government pledges, such as the Commercial Act, become active this week and uncertainties surrounding the Federal Reserve's interest rate policy are resolved, stock prices will attempt to break out of the upper range."