[Good Morning Market] US-Iran Agreement Reached... KOSPI Expected to Open Higher

On June 15, the KOSPI is expected to open higher, buoyed by news that negotiations between the United States and Iran have reached an agreement.

Last Friday in the New York stock market, the Dow Jones Industrial Average closed at 51,202.26, up 353.51 points (0.70%) from the previous session. The S&P 500 index finished at 7,431.46, up 37.16 points (0.50%), and the tech-heavy Nasdaq Composite ended at 25,888.84, up 79.18 points (0.31%).

The New York stock market was lifted as easing geopolitical risks boosted overall investor sentiment, while the spectacular debut of SpaceX supported the upward momentum. Additionally, a sharp drop in oil prices alleviated inflation concerns, which also had a positive impact.

The domestic stock market is expected to continue experiencing heightened volatility this week due to major global events. Han Ji-young, a researcher at Kiwoom Securities, analyzed, "This week, the KOSPI is likely to remain volatile, influenced by the June Federal Open Market Committee (FOMC) meeting in the U.S., the Bank of Japan (BOJ) meeting, key indicators such as U.S. May retail sales and industrial production, changes in SpaceX's stock price and supply-demand trends, and whether foreign investors continue net buying of Korean stocks."

The market's attention is focused on how hawkish the Federal Reserve's interest rate policy stance will become at this FOMC meeting. As a rate freeze itself is already regarded as a given by the market, changes to the dot plot that could indicate the future rate path, as well as the press conference by Kevin Warsh, the new Federal Reserve Chair, are seen as key variables.

In the dot plot from the March FOMC, the Fed suggested the possibility of one rate cut this year. At that time, the median forecast for the policy rate by Fed officials was 3.4%, while the current policy rate stands at 3.50-3.75%. However, the market has recently started to price in the possibility of a rate hike within this year. The main focus for this dot plot is whether the Fed will formally keep the door open for a potential rate increase.

In the domestic market, the biggest focus is the direction of foreign investor flows. On Friday, foreign investors turned net buyers on the KOSPI market for the first time in 25 trading days, purchasing 2.1 trillion won worth of stocks. From May 7 to June 11, over 24 trading days, the cumulative net selling by foreigners amounted to about 75.6 trillion won.

However, analysts note that a single day of net buying is not enough to conclude that the foreign selling cycle has ended. In particular, since the recent foreign selling was driven more by global macro uncertainty than by profit-taking in semiconductor stocks such as Samsung Electronics and SK hynix, the future direction remains crucial.

A researcher stated, "Given that the main justification for foreigners increasing profit-taking in semiconductor stocks like Samsung Electronics and SK hynix was macro uncertainty, if the June FOMC and the final stages of U.S.-Iran negotiations are digested in a neutral or better-than-neutral manner during the week, it would be appropriate to consider the possibility that foreign net buying could continue."

This content was produced with the assistance of AI translation services.