briefing on the South Korean stock market (October 12, 2023)

Hello, this is JL. Today, I will provide a briefing on the South Korean stock market. We will examine the trends and events in the KOSPI and KOSDAQ on October 12, 2023, Thursday. Additionally, we will analyze the outlook and impact of the upcoming release of the U.S. Consumer Price Index (CPI).

KOSPI and KOSDAQ Start with Gains

KOSPI and KOSDAQ started the day with gains. KOSPI closed at 2450.08, up 47.50 points (1.98%) from the previous day. KOSDAQ closed at 817.12, up 22.12 points (2.78%). During the holiday, a decrease in U.S. Treasury yields and a weakening dollar positively influenced the domestic stock market. Furthermore, positive earnings surprises from Samsung Electronics and LG Energy Solution improved market sentiment. Individual and institutional investors sold 510.4 billion KRW and 119.1 billion KRW respectively, while foreign investors bought 620.8 billion KRW.

Key Issues and Schedule

Key issues include Blue Technology, Dongwon Anatech, Samsung Electronics, and drones. Blue Technology recorded an upper limit due to a successful development of the first domestic implant-assisting robot. Dongwon Anatech, with its DizellaLife measuring blood sugar through saliva, secured a foothold for global expansion with a patent in India. Samsung Electronics partnered with U.S. healthcare company Vicell to provide customized remote medical solutions. Drones are strategically utilized by the Israeli military to prevent border infiltration by Hamas, destroying remote surveillance towers and communication.

Key schedules include options expiration date, U.S. CPI release, weekly initial jobless claims, weekly crude oil inventory report, and Delta Air Lines' earnings announcement. The options expiration date is a factor that can increase market volatility. The U.S. CPI release is a significant indicator that can affect inflation pressures and the timing of the Federal Reserve's interest rate hikes. The weekly initial jobless claims reflect the U.S. employment situation. The weekly crude oil inventory report indicates the balance of oil demand and supply. Delta Air Lines' earnings announcement provides an opportunity to confirm the recovery trend in the airline industry.

Outlook and Impact of U.S. CPI Release

The U.S. CPI release is scheduled for tonight at 9:30 PM. Experts anticipate a 0.3% month-on-month increase and a 5.3% year-on-year increase in September CPI, consistent with August's CPI level. Inflationary pressures persist due to factors like the resurgence of COVID-19 and supply chain disruptions. However, the Federal Reserve still considers inflation as temporary and excessive. The Fed has decided to reduce quantitative easing by the end of this year but postponed the timing of interest rate hikes to next year.

The impact of the U.S. CPI release on the Korean stock market is as follows. If the CPI exceeds expectations, concerns about inflation may rise, and the Fed may advance the timing of interest rate hikes. This could lead to an increase in U.S. Treasury yields and the dollar, negatively affecting the domestic stock market. Conversely, if the CPI is lower than expected, concerns about inflation may ease, and the Fed may delay the timing of interest rate hikes. This could result in a decline in U.S. Treasury yields and the dollar, positively impacting the domestic stock market.

Conclusion

Today, I provided a briefing on the South Korean stock market. KOSPI and KOSDAQ started with gains, and we discussed issues such as Blue Technology, Dongwon Anatech, Samsung Electronics, and drones, as well as key schedules like options expiration date and the U.S. CPI release. We also analyzed the outlook and impact of the upcoming U.S. CPI release on the Korean stock market. It is anticipated that we will monitor the U.S. CPI release attentively tonight. Tomorrow, I will provide an update on the trends in the South Korean stock market. JL signing off.