Market Outlook Amid KOSPI Stability and ETF Inflows
Eugene Investment & Securities has observed the KOSPI maintaining a stable trajectory despite the depreciation of the Korean won. Unlike in the past, from 2024 onward, the weaker won does not significantly impact the stock index negatively, as continuous inflows from financial investment and ETFs provide stability to the KOSPI. Notably, foreign investors have become less sensitive to currency losses, with the semiconductor sector’s profit outlook becoming a pivotal factor in their investment decisions.
In sectors other than semiconductors, foreign divestment continues to dominate. However, the favorable profit outlook for the semiconductor industry still draws the interest of foreign investors, highlighting relative stability in this sector. While foreign selling might temper the upward momentum of stock prices, the ongoing influx of investment funds and ETFs serves as a mitigating factor against severe market corrections.
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The formula of 'Weak Won=Stock Decline' has changed… ETF funds support the domestic stock market - Yonhap InfomaxAn analysis has emerged that after 2024, a weak won does not necessarily lead to a decline in domestic stock prices. According to Eugene Investment & Securities on the 17th, the correlation coefficient between the fall of dollar-won (rise in won value) and KOSPI was -0.49 from 2020 to 2023. However, it turned positive in 2024. The rise of dollar-won does not necessarily work as a negative factor for the stock market. This change contradicts the common belief that foreign investors do not want exchange loss from a weak won. This is because foreign investors are more sensitive to changes in semiconductor profit outlook than to exchange rates in the semiconductor industry.
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KOSPI Remains Stable Despite Weak Won… ETF Funds Support Without Foreign Investors [Morning Report] - Newspim[Seoul=Newspim] Reporter Lee Nayeong= On the 17th, Eugene Investment & Securities reported that the domestic KOSPI is maintaining a stable trend despite the weakness of the won. Researcher Hur Jaehwan from Eugene Investment & Securities stated, 'The relationship between KOSPI and the won-dollar exchange rate is moving differently than in the past since 2024,' and 'The weak won is affecting stock prices