“/> The KOSPI index broke the 2,500 mark during intraday trading on the morning of the 12th as it was left out of the ‘Trump rally’. This is the first time since September 11 that the 2,500 mark broke during the day. The won-dollar exchange rate fell due to the outflow of foreign funds from the stock market. It rose above 1,400 won.
Experts analyzed that as the ‘Trump trade’ (a phenomenon in which money flows into Trump-beneficiary stocks) subsides, funds are flowing into other assets that have a better response compared to the domestic stock market. For the time being, we recommend paying attention to defense and shipbuilding stocks that have performance triggers, as well as banking stocks that are expected to see deregulation.
Diagnosis ①: “Exchange rate vicious cycle”
New York NDF market last night was last quoted at 1,400.0 won. The closing price at 2 am on this day was calculated to be 1,401.0 won. It rose by 6.15 won compared to 3:30 pm the previous day (1,394.85 won). This is the first time in two years that the exchange rate closed above 1,400 won since November 7, 2022 (1,401.2 won).
This is a strong influence of the dollar’s move to dominate global stock markets following former President Donald Trump’s election in the U.S. presidential election. On this day, the dollar index, which reflects the value of the dollar against six major currencies, exceeded 105.7. It is the highest level in about four months.
The tax cut policy promised by President-elect Trump is expected to stimulate fiscal expansion and stimulate the issuance of government bonds. It is assessed that the issuance of government bonds can increase the value of the dollar by delaying interest rate cuts. President-elect Trump’s protectionist policies also reduce the supply of dollars, causing the dollar to strengthen.
A strong dollar is beneficial to export companies, but this will be offset once President-elect Trump’s tariff policy is implemented. The Korea Institute for International Economic Policy (KIEP) estimated that if a 10% universal tariff is imposed on Korea after the inauguration of the Trump administration, exports to the United States will decrease by $15.2 billion and indirect exports to third countries will decrease by about $7 billion to $8.9 billion.
Shin Joong-ho, head of the LS Securities Research Center, said, “The current exchange rate level is partly due to the growth rate of the gross domestic product (GDP),” and added, “Unlike in the past when domestic export companies grew together during the rise in the won-dollar exchange rate, currently, semiconductor exports are sluggish.” “Impact,” he analyzed.
This means that a vicious cycle is occurring in the domestic stock market: Rising won-dollar exchange rate → Declining domestic investment attractiveness for foreigners → Selling won-denominated assets for foreigners → Rising won-dollar exchange rate.
Diagnosis②: Samsung Electronics difference between vs toyota
United States.”
Diagnosis ③: “There are many things to buy other than K stocks.”
