Korean stock market shaken by renewed U.S.-China tensions, will the downtrend continue? [Preview of today's market]

On the 15th, the KOSPI index is widely expected to open lower, influenced by U.S. President Donald Trump's tough remarks on China.

The securities market has fallen for two consecutive trading days since the 13th as concerns over trade tensions between the U.S. and China grew. The KOSPI closed at 2561.81, down 0.63% from the previous day. The KOSDAQ also closed at 847.96, down 1.46%.

Overnight, the three major New York indices showed mixed results. In New York trading, the Dow rose 0.44% from the previous close, but the Nasdaq and the S&P500 fell 0.76% and 0.16%, respectively. The S&P500, which had shown an intraday rebound amid President Trump's tough remarks on China, gave up its gains and turned negative. President Trump said shortly before the close that China "is considering severing business relationships for cooking oil and other traded items as a retaliatory measure" in relation to the halt of U.S. soybean imports.

Analysts say that growing U.S.-China trade tensions are putting downward pressure on the indices. On the 10th, China moved to control rare earth exports and President Trump warned of a 100% additional tariff; overnight, China criticized the halt of U.S. soybean imports and announced retaliatory measures, which is said to have affected the indices.

U.S. tech stocks were also adjusted. NVIDIA plunged 4.41% that day after cloud company Oracle announced it would deploy 50,000 of AMD's advanced artificial intelligence (AI) chips in its cloud. The Philadelphia Semiconductor Index also fell 2.3%. Tesla, which had surged more than 5% the previous day, fell 1.5%.

Securities firms forecast that the domestic market will face renewed downward pressure as U.S.-China trade tensions escalate and tech stocks like NVIDIA weaken. The Morgan Stanley Capital International (MSCI) Korea ETF, which gauges investor sentiment toward the domestic market, fell 1.11%.

Han Ji-young, a researcher at Kiwoom Securities, said, "The U.S.-China trade conflict is holding back the domestic stock market," and "depending on the impact of President Trump's tough remarks on China, profit-taking pressure will also increase."

However, some analysts say that Jerome Powell, Chair of the U.S. Federal Reserve (Fed), emphasizing increased downside risk to the labor market over inflation uncertainty in an overnight public speech, and the perception that domestic semiconductor stocks such as Samsung Electronics have fallen more than warranted by strong earnings, could help support the downside of stock prices.

Reporter Eun-hyeok Ryu ehryu@hankyung.com