NH Securities KOSPI band 2360~2520 selection
“Relief rally likely to continue until US consumer prices are announced”
Currently, the biggest concern in the stock market is whether it is a recession or not. Although the US economy recorded negative growth for two consecutive quarters following the first quarter, it is difficult to formalize a recession as income and employment conditions are favorable compared to the previous recession.
In the midst of this, the stock market predicted that the domestic stock market would show a stable flow this week (August 1 to August 5). Investor sentiment is expected to improve in the short term as the US central bank (Fed) is relieved of the possibility of adjusting the rate of interest rate hikes in a situation where the economic recession is unclear.
According to the Korea Exchange on the 31st, the KOSPI index finished trading last week at 2451.5 points, up 58.36 points (2.44%) from the previous week. The index has closed higher for the past week and settled at the 2450 level. Looking at supply and demand, individuals and institutions net sold 685.2 billion won and 32.5 billion won, respectively, and foreigners alone bought 764.4 billion won over the past five trading days.
The KOSDAQ index also rose. The index closed at 803.62, up 13.87 points (1.76%) from the previous week on the 29th, the previous trading day. In Jeonju, individuals alone net bought 2007 billion won, while foreigners and institutions sold 79.8 billion won and 72.2 billion won.
This week, the stock market is expected to show a relief rally similar to the previous week. Until the U.S. consumer price index comes out in July, the opinion is that the upward momentum, such as the price peak (peak-out) and Fed policy expectations, will be maintained. NH Investment & Securities presented the 2360-2520 range as a band for the KOSPI index next week.
The Fed announced on the 27th (local time) that it would raise interest rates by 0.75 percentage points after the regular meeting of the Federal Open Market Committee (FOMC). As the Fed took the ‘giant step’ of raising the base rate by 0.75 percentage points at a time for two months in a row, the US base rate has risen to 2.25-2.50% a year, higher than Korea’s base rate (2.25%). The U.S. stock market rose for the second day in a row after the announcement. Investors were concerned about the possibility of a 75bp rate hike in September, but that fear has eased.
Kim Young-hwan, a researcher at NH Investment & Securities, said, “In July, the global stock market rebounded with expectations for a peak in inflation (inflation) and expectations that the Fed’s policy stance could change to accommodative if there were signs of a recession in the future.” “The July FOMC interpreted it as supporting the market’s expectations,” he said.
Kim Yu-mi, a researcher at Kiwoom Securities, also said, “In the short-term financial market, it is possible to pay attention to the relief that the pace of the Fed’s rate hike can be controlled in a situation where the economic recession is uncertain. The results of the mixed indicators led Fed members to raise expectations for a soft economic landing. “This can be positively reflected in the investment sentiment in the financial market in the short term.”
Shin Min-kyung, reporter at Hankyung.com radio@hankyung.com
