Last week (13-17), the KOSPI index finished trading at 2395.69, up 0.04% from the previous week. In the stock market, institutions net bought 81.8 billion won and foreigners net bought 73.4 billion won, while individuals net sold 174.5 billion won. The KOSDAQ index also closed at 797.39, up 1.1% from the previous week.
The US stock market showed a mixed trend as there were expectations that the interest rate rise trend could soften despite fears of a fall in the financial market due to the bankruptcy of Silicon Valley Bank (SVB) in the US. Specifically, the win-dollar exchange rate fell back to the low of 1,300 won. On the 17th, the exchange rate won against the US dollar in the Seoul foreign exchange market closed at 1302.2 won, down 10.8 won from the previous trading day (1313.0 won). The exchange rate fell by around 1.6% compared to last week. The win-dollar exchange rate, which increased from 90.7 won over the past month due to concerns about US tightening and the depreciation of the win, has fallen. This is due to expectations of a recession in the tendency to raise interest rates.
This week, the KOSPI index is expected to be divided by the results of the regular meeting of the Federal Open Market Committee (FOMC) of the central bank of the United States, the Federal Reserve System (February · Fed). The market is a little optimistic, but peace of mind is prohibited. A ‘baby step’ (a 0.25% point increase in the base rate) is very likely, but the possibility of a big step (a 0.5% point increase in the base rate) cannot be ruled out. As the European Central Bank (ECB) took a major step last week despite the liquidity crisis at Credit Suisse (CS), it is not yet known what decision the Fed will make. In this situation, the KOSPI is expected to bend or rebound depending on the US interest rate hike decision. Even if it is raised by only 0.25 percentage points, the stock market can fluctuate rapidly even if the possibility of an increase is hinted at in the next meeting.
◇ Comment collected at a major event… Yeonjun’s ‘baby step’ is likely
As the shock of Credit Suisse (CS) was added to the outcome of the recent SVB bankruptcy, market uncertainty increased, but the market was relieved by news of a joint bailout from First Republic Bank. The rise in the three major stock indexes in New York last week following the announcement of a bailout plan by a major bank for First Republic also affected the domestic stock market. The KOSPI index closed higher on 3 out of 5 trading days. The KOSDAQ index also closed higher on 4 out of 5 trading days.
Now, market attention is focused on the large-scale FOMC event to be held on the 23rd (Korea time). Attention is focused on where the Fed will prioritize between price stability and the financial market crisis arising from the GMB. As the US’s rapid tightening policy shakes the US financial system, voices calling for a change in the path of interest rate hikes are growing. Accordingly, the market believes that the possibility of the Fed promoting baby steps is strong. In the second half of this year, there is a possibility of a pivot (policy turn) to lower interest rates.
In fact, investors expect a freeze, not even a baby step. According to the Chicago Mercantile Exchange’s (CME) FedWatch on the 17th, the Fed Funds (FF) interest rate futures market sees an 80% chance that the Fed will raise the benchmark rate by 25 basis points this week. But Goldman Sachs and Barclays believe the Fed will hold interest rates. 45% of domestic bond experts also predicted that the base rate would be frozen.
After all, this week’s KOSPI index is expected to change depending on the Fed’s interest rate decision. If the Fed forces the big step, it is predicted to rise below 2300, and if it goes to the baby step, it will rise up to 2450. It should also be noted that the spread of bank risks is also a factor that n increasing the downward pressure on the KOSPI.
Investors appear to be reacting conservatively to concerns in the banking sector ahead of the regular FOMC meeting. On the 17th (local time), the New York stock market closed lower due to unrest in the banking sector ahead of the regular FOMC meeting to be held this week. On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average 30 closed at 31,861.98, down 384.57 points (1.19%) from the battlefield. The Standard & Poor’s (S&P) 500 index closed at 3916.64, down 43.64 points (1.10%) from the battleground, and the Nasdaq closed at 11,630.51, down 86.76 points (0.74%) from the battleground.
Kim Young-hwan, a researcher at NH Investment & Securities, said, “Investors are paying close attention to what the Fed will do in response to the recent increase in the possibility of a crisis in the banking sector.” It will have a positive effect,” he said. He added, “There is a possibility that the wait-and-see sentiment of investors will be high in the short term, considering the possibility of the expansion of the banking crisis.”
Other major weekly events this week include consumer prices for February in the euro area (17th), industrial production in the US for February (17th), the consumer sentiment index for the University of Michigan in the US for March (17th), and the Conference Board leading economic index for February in the United States (17), and the US FOMC (23).
◇ The market that gave attention to secondary batteries and robots such as Ecopro and Rainbow Robotics… This week is also a ‘theme’ rather than an index
Last week, battery-related secondary stocks drew attention. Stocks associated with secondary batteries, which are representative stocks Eco Pro (086520)a Ecopro BM (247540)shows a sudden increase. Based on last week’s closing price, EcoPro recorded 438,000 won, up 325.24% from the start of the year. The share price, which was in the early 100,000 won range, more than quadrupled as it rose to the mid 400,000 won range. Ecopro BM, a subsidiary of Ecopro, also closed at 216,000 won, up 134.53% over the same period.
Ecopro and Ecopro BM are bio companies Celltrion Healthcare (091990)and ranked first and second in market cap on the KOSDAQ, respectively. However, due to the short-term overheating, on the 17th, Ecopro and Ecopro BM fell by 8% and 7%, respectively. This is because foreigners who had been buying stocks terribly started to put them on the market. Because of this L&F (066970)a Cheonbo(278280), Sungil Hitech (365340) Battery-related secondary stocks also showed weakness. On the other hand, stocks such as semiconductors, pharmaceuticals, bio, and robots have been bought. especially Rainbow Robotics (277810)it suddenly rose as rumors about acquiring additional funds at Samsung were discussed.
It is also expected to reopen in China this week. This is because the Gimpo-China route, which was suspended for three years due to the Corona 19 incident, will reopen on the 26th at the pre-Corona 19 level. Lotte Tourism Development (032350), Paradise (034230), Shilla Hotel (008770), Amore Pacific (090430), LG Home Care and Health (051900), Korean Air (003490), Jeju Air (089590) Stocks related to cosmetics, airlines, casinos, and travel are worth paying attention to. also Hyundai Steel (004020), Dongkuk Steel (001230), POSCO Holdings (005490) Steel and metal related stocks can also be considered as sectors of interest. In addition, stocks related to renewable energy, such as solar power, wind power, and hydrogen, are considered stocks to watch with interest.
