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[이슈+] Stocks shaken by fear of Omicron… Are economically sensitive stocks effective?

KOSPI rebounds in 7 days… “Volatilities still remain, Omicron analysis remains to be seen”

[서울=뉴스핌] Reporter Jeong Gyeong-hwan and Kim Yang-seop = The domestic stock market is continuing its volatility section. On the morning of the 1st, on the morning of the 1st, the news that the existing vaccine was also effective for ‘Omicron’ eased market concerns again and turned to an uptrend. However, it is too early to be reassured. It is predicted that the global stock market will inevitably fluctuate until the research results on the new mutated Omicron come out.

As of 11:10 am, the KOSPI recorded 2877.29, up 38.28 points (1.35%) from the previous day. With the rebound in 7 trading days, the KOSPI fell by 5.8% during this period, breaking down to the 3000 level as well as the 2900 line. In particular, the KOSPI also hit a new low, dropping 3.3% over two days on Monday and Tuesday after the global stock market plunged on fear of Omicron.

Jung Yong-taek, head of research at IBK Investment & Securities, said, “The market has leveled down due to the addition of a new uncertainty called Omicron in a situation where the market base is not very good, such as tapering and interest rate hikes. I think that the impact of Omicron’s occurrence in an unstable situation, such as the increase in the number of confirmed COVID-19 cases, was a big factor,” he said.

As of 00:00 on the same day, the number of new confirmed cases of COVID-19 in Korea recorded 5,123, exceeding the 5,000 mark for the first time. The number of patients with severe gastritis has reached 723, a record high.

On the 1st, the KOSPI started trading at 2860.12, up 21.11 points (0.74%) from the previous day. [사진=김민지 인턴기자]

The reason the KOSPI, which had been weak, succeeded in reversing its uptrend today, seems to be because concerns over ‘Omicron’ have somewhat subsided.

Seo Sang-young, a researcher at Mirae Asset Securities, said, “The US stock market closed lower on the possibility of accelerating tapering despite alleviating concerns about mutations in Omicron, but the number of new confirmed cases in South Africa related to Omicron and the CEO of BioNtech insisted that the vaccine was effective (for Omicron), etc. This will have a positive effect on the domestic stock market,” he said.

US stocks fell 1.86% in the Dow, 1.90% in the S&P 500 and 1.55% in the Nasdaq last night, respectively, as Fed Chairman Powell said the economy was very strong and inflationary pressures were higher and that it was appropriate to talk about an early end of the tapering.

Park Sang-hyeon, a researcher at Hi Investment & Securities, said, “It is believed that the reason why the global financial market panicked with the emergence of Omicron is because of concerns that ‘with Corona’ could be wiped out. In a situation where movement restrictions are being strengthened around the center, the appearance of Omicron further stimulated fear.”

Although the KOSPI is rebounding, the possibility of volatility remains. This means that day-to-day fluctuations are meaningless.

An individual investor, so-called ‘super ant’, said about the KOSPI rebound on this day, “There is a pre-reflection aspect, such as yesterday’s plunge.” said He continued, “It is a highly volatile market, where there may be another plunge if there is any delay, and the selling walls and resistance lines continue to pile up.” He said, “The market’s power is very weak. there,” he added.

General Manager Jung Yong-taek said, “There is no need to give meaning to going back and forth from day to day,” he said.

What should be your future response strategy? While the experts ordered to watch the Omicron analysis results calmly, they advised an investment strategy centered on large-cap economy-sensitive stocks.

Park Yun-cheol, a researcher at Hi Investment & Securities, said, “It takes about two weeks for a detailed analysis of Omicron. Until then, volatility due to news flows related to Omicron will be inevitable. However, it should be noted that the global economy is in a downward phase and the fundamentals for a rebound are not solid.”

Kim Byung-yeon, a researcher at NH Investment & Securities, predicted, “The global stock market will be ecstatic about the news until two weeks later, the results of the Omicron study on infectivity, mortality, and vaccine effectiveness by a South African research team are announced.”

If Omicron’s fatality rate and transmission power are both high, rumors about the uselessness of current vaccines and treatments spread, and economic activity suspension (lockdown) becomes a reality, concerns about an economic slowdown in the stock market may increase. However, in our experience so far, mutations have an inverse correlation between the transmission power and the fatality rate (the higher the transmission power, the lower the fatality rate), and preparations for new vaccines and therapeutics are in progress. Lockdown at the federal level is not easy.

Kim Byung-yeon, a researcher at the time, said, “It is unlikely that the financial market will fall into a ‘panic’ due to Omicron. In this case, cyclical stocks that have fallen further are considered more attractive, and the market’s style is likely to change to cyclical stocks. The response seems to be valid,” he added.

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