Renewed Support Anticipated For South Korea Stock Market

On Monday, the South Korean stock market broke a four-day winning streak, during which it had risen over 130 points or 5.5%. The KOSPI is currently positioned just below the 2,490 mark, with expectations of a rebound on Tuesday. Global market forecasts for Asian stocks are mixed but lean towards a positive outlook, particularly due to robust support from technology companies. While European markets experienced declines, U.S. markets showed a mixed performance, likely influencing a similar trend in Asian markets. On Monday, the KOSPI witnessed a slight drop, primarily affected by losses in the financial and industrial sectors, whereas technology stocks displayed a mixed response. The index fell by 5.49 points or 0.22%, closing at 2,488.97, when it ranged between 2,483.43 and 2,515.62. The trading volume was robust with 515 million shares valued at 8.2 trillion won, consisting of 487 gainers against 397 decliners. Key movements included KB Financial falling by 0.47%, Hana Financial by 1.34%, Samsung Electronics by 0.89%, while Samsung SDI gained 0.96%, SK Hynix surged 2.17%, and Naver increased by 1.90%. Other notable shifts saw LG Electronics decrease by 0.57%, Lotte Chemical rise by 3.82%, and SK Innovation drop by 1.99%.

The signal from Wall Street was cautiously optimistic, with major indices starting mixed on Monday and concluding in a similar fashion. The Dow Jones Industrial Average decreased by 110.58 points or 0.25%, ending at 43,717.48. In contrast, the NASDAQ climbed 247.17 points or 1.24%, achieving a record close at 20,173.89, and the S&P 500 grew by 22.99 points or 0.38%, closing at 6,074.08. Wall Street's overall strength was fueled by anticipation of the Federal Reserve's monetary policy decision, where it is broadly projected to continue lowering interest rates. Current projections from CME Group's FedWatch Tool indicate a 99.1% probability of a 25 basis point rate cut by the Fed. The NASDAQ's leap was driven by significant gains in semiconductor stocks, with the Philadelphia Semiconductor Index climbing by 2.1%. Networking stocks also displayed substantial strength, pushing the NYSE Arca Networking Index up by 2.0% to a new record high.

Investor enthusiasm was tempered somewhat by persistent inflation concerns, suggesting the Fed might reduce rates more gradually next year than initially expected. In economic developments, the Federal Reserve Bank of New York reported a steep decline in regional manufacturing activity for December. Crude oil prices dipped on Monday, pressured by concerns over demand following underwhelming Chinese economic data and tariff threats. West Texas Intermediate Crude oil futures for January settled lower by $0.58, finishing at $70.71 per barrel.

The material has been provided by InstaForex Company - www.instaforex.com
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