Market clearing in the first week of March, resting stock market

Market clearing in the first week of March, resting stock market

Foreign Change – Active Market

Stocks were in good shape this week, boosted by gains in U.S. stocks. U.S. stocks remained strong, with lower interest rates contributing to the index’s gains. Higher-than-expected inflation and Powell’s dovish comments pushed Treasury yields lower quickly. But Friday’s announcement of good employment lowered expectations for a rate cut. In addition, the Nasdaq Composite fell sharply as large-cap Nvidia plunged.

The Korean stock market led the market’s rise, with existing leaders strengthening overall. SK Hynix continued its upward trend with new highs, low PBR cars such as Hyundai Motor, Kia Motors, and KB Financial, and bank stocks rising. Other than that, defense companies, power equipment companies, and bio were strong. Defense companies such as LIG Nex1 and Hanwha Air all saw their orders increase, performance improvement, and foreign supply and demand go well. Power equipment companies, such as Jeryong Electric, hit new highs last week due to Hyosung Heavy Industries’ good performance and increased momentum for electricity demand in the AI era. Bio’s shares of biotech companies surged in connection with the cancer association, and the news that HLB, the No. 1 KOSDAQ bio company, was listed as a new drug for liver cancer on the U.S. PBM prescription list.

Since the last maturity date (December 15, 2023), the cumulative net purchase of foreigners has flowed in 13.8 trillion won. No matter what anyone says, the investment entity that is leading the rise now is foreigners. An analysis of foreign supply and demand came out last week, and an analysis showed that recent foreign purchases are British funds. U.S. funds have a lot of passive funds, but British funds have a lot of active funds centered on hedge funds. The recent inflow of foreigners is putting a little more weight on value stocks. This seems to be due to expectations for a Korean value-up program. Foreigners who have witnessed the strength of the Japanese stock market seem to expect similar possibilities in Korea. When active funds come in, they come in for excess profits. It is characterized by creating a strong rise in individual industries and stocks rather than an increase in the index as a whole. It should be noted that the volatility of stocks or industries can be very large.

Due to the influx of foreign funds and the decline of Nvidia, bio with low PBR stocks and cancer society momentum is expected to show a stronger trend next week as semiconductors rest. Nvidia’s volatility was a bit high, but AI is still the leading player. Investors with a small proportion of semiconductors should take advantage of this opportunity.