This week’s KOSPI range is expected to be between 2950 and 3150
US Treasury Rate Rise and Valuation Burden Still Still
(Photo = Getty Image Bank)
The direction of the domestic stock market this week (March 2-5) is expected to draw attention to the trend of US Treasury yields and both sides in China. It is noteworthy whether the results of the two meetings in China can serve as a factor for stabilizing the market and boost investor sentiment.
According to the financial investment industry on the 28th, the KOSPI index is expected to repeat fluctuations within the range of 2950~3150 this week.
Although the US administration’s discussion of additional stimulus measures and vaccination against the novel coronavirus infection (Corona 19) that started in Korea are factors that increase the stock market, a rise in US Treasury yields and a valuation burden could increase the likelihood of a decline in the index.
Last week, the domestic stock market plunged due to the shock from rising US Treasury yields. However, thanks to the individual’s net purchase of over 3 trillion won, it managed to keep the 3000 line.
In the New York Stock Exchange last week, major indices ended mixed tax after showing great volatility linked to fluctuations in US Treasury yields. The Dow Jones 30 Industrial Average fell by 1.8% last week. The Standard & Poor’s (S&P500) index fell by about 2.5% and the Nasdaq fell by 4.9%.
Zero Powell, chairman of the U.S. Central Bank (Fed), has dismissed concerns about inflation, but the market reaction is still unstable.
The US 10-year Treasury bond yield has exceeded the psychological resistance level of 1.5%. For the time being, it is expected that volatility will increase while paying attention to the direction of US interest rates.
Young-hwan Kim, a researcher at NH Investment & Securities, said, “The biggest anxiety factor in the stock market is the increase in US Treasury yields.” You need to take that into account,” he said.
The market’s interest this week is expected to be concentrated on both sides of China. According to foreign media, there is a forecast that an economic stimulus plan worth 25 trillion yuan will be passed through both meetings. Expectations for investment from China have been high every year, but this year, interest is bound to draw more attention along with reflation.
The market is paying attention to the economic growth target of the 14th Five-Year Plan (2021-2025) starting from this year and the realization of the bicyclic strategy. In particular, the key question is whether policy capabilities can be focused on domestic consumption, which requires a relatively additional recovery in the aftermath of Corona 19.
Dae-hoon Han, a researcher at SK Securities, said, “If economic stimulus measures are actually passed at both meetings and specific guidelines come out, raw materials, economically sensitive industries, and strong reflation will continue, but in the opposite case, disappointing sales may come out.”
Even in a market of widening volatility, individual investors continue to buy. This year, it has net bought 2.73 trillion won, and after February, it has net bought 4.90 trillion won. As liquidity remains abundant, the buying trend is expected to continue.
In this situation, experts advised that from an industry perspective, we should pay attention to US exports and domestic consumers. Usually, the rise in inflation expectations in the US leads to an increase in exports by Korean companies. We recommended semiconductors, automobiles, and distribution as industries of interest.
Eunji Cha, reporter Hankyung.com [email protected]