"Even the bureau chief is fired up"... U.S. rate cut tailwind leaves KOSPI also 'clear' [Preview of today's market]

On the 11th, the KOSPI index is expected to show an upward trend thanks to the tailwind from the Federal Open Market Committee (FOMC) meeting in the United States.

The U.S. central bank (Fed) held an overnight FOMC meeting and lowered the policy rate by 0.25% percentage point to 3.50∼3.75%.

Fed Chair Jerome Powell said at a press conference, "With the policy adjustments since September, our policy now lies within a reasonable range of estimates of the neutral level," and added, "We are in a good position to watch for changes in the economic situation going forward."

The policy statement added the phrase 'degree and timing' regarding future policy rate decisions, taking a cautious stance on additional rate cuts.

It signaled that next year's rate cuts would be limited to one. The dot plot showing rate forecasts maintained expectations of a 0.25% percentage point cut in 2026 and an additional 0.25% percentage point cut in 2027. Analysts view this as continuing a rate-cutting stance to respond to worsening employment conditions while being a 'hawkish rate cut' considering inflationary pressures.

However, it drew a line on rate increases. It decided to supply liquidity to the market through purchases of short-term Treasury securities. It also emphasized that calls for further cuts were considerable, leading to assessments that its relatively hawkish character was weak.

He assessed that the labor market has been gradually cooling and diagnosed a significant downside risk related to employment. Markets, which had somewhat expected that the Fed would cut rates while adopting a cautious future policy stance given the split among Fed officials, did not significantly change expectations for next year's policy rate despite Powell's expression of 'prudence.'

CME's FedWatch reflected a 52% probability around New York market close that the Fed will keep policy rates at current levels through March next year. The day before, that probability was 54%.

Overnight, the three major U.S. stock indices closed higher on the rate cut news. The Dow Jones Industrial Average closed at 48,057.75, up 1.05% from the previous close. The S&P 500 closed at 6,886.68, up 46.17 points (0.67%), and the tech-heavy Nasdaq Composite closed at 23,654.16, up 77.67 points (0.33%).

The previous day, the KOSPI closed at 4,135, down 0.21% from the previous trading day. Shares of the top market-cap companies on the KRX moved mixed. SK Hynix rose 3.71% on news it is considering listing in the U.S. in the form of American Depositary Receipts (ADRs). Samsung Electronics (-0.37%), LG Energy Solution (-0.45%), and Hyundai Motor (-1.47%) fell.

Han Ji-young, a researcher at Kiwoom Securities, said, "We judge that this December FOMC was less of a 'hawkish cut' than recent market concerns suggested," adding, "Since domestic market valuation (price relative to earnings) and earnings momentum also point more to upside than downside for stock prices, it is appropriate to avoid responding conservatively to today's volatile market."

Maeng Jin-gyu reporter maeng@hankyung.com