The domestic stock market is expected to see a rebound in buying interest despite the pressure from rising U.S. long-term government bond yields. While the three major U.S. stock indices closed slightly lower, the Philadelphia Semiconductor Index rose, and both KOSPI night futures and the MSCI Korea Exchange-Traded Fund (ETF) showed strength, which is a positive sign.
On September 29, the Dow Jones Industrial Average closed down 131.59 points (0.26%) at 51,349.92. The S&P 500 index fell 12.85 points (0.17%) to finish at 7,670.84, while the Nasdaq Composite Index dropped 22.84 points (0.09%) to close at 26,797.54.
The rise in U.S. long-term government bond yields has put pressure on the stock market. The yield on the 30-year Treasury bond reached 5.612% during trading, marking the highest level since June 2002. The yield on the 10-year Treasury bond also traded at 5.265%, hitting its eighth highest level since 2007 this month.
Bond yields increased despite weak consumer confidence and job market indicators. The yield on Japan's 10-year government bonds remained near a 30-year high at 3.090%, while the 40-year bonds reached 4.225%, raising concerns that Japanese institutional investors may reduce their purchases of U.S. Treasuries. Additionally, hawkish comments from Michael Barr, a member of the U.S. Federal Reserve, contributed to the rise in yields. Conversely, John Williams, president of the New York Federal Reserve, mentioned the possibility of one more rate hike, which led to a decline in short-term bond yields.
International oil prices fell amid expectations of normalized oil supply from the Middle East. With the reactivation of Saudi Arabia's east-west oil pipeline, oil exports from major Middle Eastern countries reached 16.33 million barrels per day in September, recovering to 84% of pre-war levels. News that the U.S. plans to release up to 40 million barrels from its strategic petroleum reserve also contributed to the decline in oil prices.
Indicators related to the domestic stock market are relatively favorable. The MSCI Korea ETF rose by 1.92%, and the MSCI Emerging Markets ETF increased by 0.30%. The Philadelphia Semiconductor Index also gained 1.32%, while the Dow Transportation Index rose by 0.35%. However, the Russell 2000 Index, which is sensitive to interest rate changes, fell by 0.35%. KOSPI night futures increased by 1%.
The exchange rate also saw a slight decline. In the previous day's Seoul foreign exchange market, the won-dollar exchange rate was recorded at 1,356.7 won, while the one-month non-deliverable forward (NDF) market showed a rate of 1,352.7 won.
In the NXT pre-market, semiconductor stocks are showing strength. As of 8:20 a.m. on September 30, Samsung Electronics rose by 1.65%, and SK Hynix increased by 1.30%. Other stocks, including Samsung Electro-Mechanics (1.90%), SK Square (1.07%), and Hyundai Motor (0.29%), also saw gains.
Seo Sang-young, a researcher at Mirae Asset Securities, summarized the current environment for the domestic stock market as 'pressure from long-term interest rates and rebound buying.' While the rise in U.S. long-term Treasury yields is a concern, the 1.92% increase in the MSCI Korea ETF and the respective rises of 1.32% in the Philadelphia Semiconductor Index and 1% in KOSPI night futures suggest that attention should be paid to the potential for rebound buying in the domestic market.
* This article has been translated by AI.
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