South Korea's Kospi Edges Lower, Snaps Five-Day Winning Streak — Market Talk

The benchmark KOSPI fell 0.4% to close at 2,632 points on Monday, erasing earlier gains and snapping a five-session winning streak, with chip and steel stocks leading the retreat.

Investor sentiment took a hit after the Constitutional Court reversed Prime Minister Han Duck-soo’s impeachment, reinstating him as acting leader while the nation anxiously awaits a ruling on President Yoon Suk Yeol’s political future.

These developments underscored South Korea’s political instability, while the looming April 2 deadline for Trump’s reciprocal tariffs added further pressure.

Among index heavyweights, chipmakers Samsung Electronics and SK Hynix both dropped 1.9%.

In the steel sector, Posco Holdings (-5.7%) and Korea Zinc (-3.2%) led the losses.

Eurozone bond investors will watch flash estimate March purchasing manager indices for France, Germany and the eurozone on Monday. The data will be a crucial input ahead of the European Central Bank's rate decision in April, Danske Bank Research's senior analyst Jesper Fjaerstedt says in a note. The eurozone's composite PMI index is expected to rise to 50.7 this month from 50.2 in February, driven by improvement in both the manufacturing and services sectors, according to The Wall Street Journal's poll of analysts. Money markets are pricing a 25-basis-point ECB interest-rate cut in April with a 63% probability, while the likelihood of unchanged rates is 37%, according to LSEG data. (emese.bartha@wsj.com)

European equity markets were set to open higher on Monday, as investors awaited preliminary PMI data from across the region for fresh insights into the bloc’s economic health.

Market sentiment also improved following reports that US President Donald Trump may take a less aggressive stance on his reciprocal tariffs, which are set to take effect on April 2.

Meanwhile, there are no major earnings releases scheduled in Europe for the day.

In premarket trade, Euro Stoxx 50 futures rose 0.3%, while Stoxx 600 futures gained 0.2%, tracking gains in US stock futures.

Australian shares were flat with a positive bias on Monday's close, despite a rise in Wall Street markets, as investor concerns eased over President Donald Trump's impending tariffs.

The S&P/ASX 200 Index was little changed to close at 7,936.9.

US President Trump's aides and allies said that the next round of tariffs could avoid the broad-based approach that markets have feared, and may be more targeted, Bloomberg reported.

Traders however remain cautious as China and Australia warn US trade policy could shock the global economy, the report said.

"There could always be some unexpected development, or President Trump could mention something this week that suggests a harder line. So it's hard for markets to adequately price in the risk at this stage," said Khoon Goh, head of Asia research at ANZ Group Holdings.

On the domestic front, Australia's business activity rose at its fastest pace in seven months, with growth in manufacturing output at a 29-month high, according to a monthly survey by S&P Global.

In company news, Opthea said its Combination OPT-302 with Aflibercept (COAST) study in patients with wet age-related Macular Degeneration, failed to meet its primary endpoint. Given uncertainties regarding the trial and a reported $113.8 million in cash, the company added there is significant doubt about its ability to continue as a going concern.

James Hardie Industries signed a definitive agreement to acquire New York Stock Exchange-listed Azek Co. for $8.75 billion. Shares of the company fell 15% at market close and earlier hit a two-year low.

Lastly, Helia Group H said its supply and service contract with Commonwealth Bank of Australia could potentially not be renewed beyond the expiry on Dec. 31. Shares of the group fell 26% at market close.

Weighed by the slowdown in the services activity in March, the HSBC Flash India Composite Output Index, a seasonally adjusted index that measures the month-on-month change in the combined output of India's manufacturing and service sectors, eased to 58.6 in March against a final reading of 58.8 in February.

Flash services PMI is an early estimate of the PMI for a country.

The services sector's index slipped to 57.7 in March compared with February's final figure of 59.0). On the other hand, flash manufacturing PMI was up at 57.6 in the reported month from 56.3 a month ago, according to the HSBC Flash India Purchasing Managers' Index (PMI) data released on Monday.

"The output index rose to its highest level since July 2024. Yet the margin squeeze on manufacturers intensified as input price inflation ticked up while factory gate prices rose at the weakest rate in a year," said Pranjul Bhandari, Chief India Economist at HSBC.

As per the report, there was a moderation in new export orders growth to a three-month low amid tariff announcements.

Business confidence remained strongly positive, but the overall level of sentiment slipped to a seven-month low in March over worries of stiff competition.

Benchmark indices Nifty 50 and Sensex extended their winning rally to the sixth consecutive session, reclaiming one-month highs as the bulls took over the reins from the bears and exiting the correction phase. The Nifty 50 decisively topped the crucial 23,500 mark, while Sensex soared 900 points intraday.

With its gains, the Nifty 50 has exited the technical correction zone. Markets are said to be in a corrective phase when they fall 10 percent from their highs. However, with Nifty 50's current level of 23,658.30, the Nifty 50 is lower by 9.96 percent from its all-time high of 26,277.35, technically exiting the correction phase.

The Sensex index too, exited the correction phase, trading at 77,928.12, lower by 9.3 percent compared to its all-time high of 85,978.25.

At 1:24 pm, the Sensex was up 1,022.61 points or 1.33 percent at 77,928.12, and the Nifty was up 303.00 points or 1.30 percent at 23,653.40. About 2472 shares advanced, 1183 shares declined, and 128 shares unchanged, indicating the market breadth was in favour of the bulls.

The broader markets mildly outperformed the headline indices, with the Nifty Midcap 100 and Nifty Smallcap 100 indices soaring 1.3 and 1.2 percent respectively. In the sectoral space, 12 out of the 13 sectoral indices traded with sharp gains, barring Nifty Auto which traded flat with a negative bias.

Banking stocks led the rally, with Bank Nifty, Nifty Private Bank and Nifty PSU Bank indices soaring over two percent each. Kotak Mahindra Bank, Axis Bank, and SBI were among the top gainers across the Bank Nifty and Nifty 50 indices, as investors bought into the large-cap banking names, given reasonable valuations.

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The return for foreign portfolio investors to Indian equities is among the various factors driving the optimism. Last week saw aggressive short covering by FIIs in the index futures segment, further supporting the rise in the domestic benchmarks. However, 68 percent still remain on the short side.

"We expect their short covering activity to continue in the coming days, which augurs well for the market's upward momentum," said Devarsh Vakil, Head of Prime Research, HDFC Securities.

Further, after four straight weeks of losses, Wall Street managed to eke out mild gains on Friday. The gains came following US President Donald Trump hinting that he would be flexible regarding a new round of tariffs expected to be imposed early next month. The Dow Jones Industrial Average rose 0.08 percent, the S&P 500 rose 0.08 percent to 5,667.44 and the Nasdaq Composite rose 0.52 percent, on Friday.

Going ahead, experts advise caution despite the bullish undertones seen in the markets. "Investors have to be careful. April 2, 2025- the reciprocal tariffs day- is looming large and the uncertainty surrounding that is huge. Investors can wait for clarity to emerge regarding the reciprocal tariffs before taking a call on further investment," stated V K Vijayakumar, Chief Investment Strategist, Geojit Investment Services.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.