Despite news of the U.S. benchmark interest rate cut for the first time in four years and six months, the domestic stock market and Bitcoin showed a lukewarm response, contrary to market expectations.
According to the Korea Exchange on the 19th, KOSPI closed at 2580.80, up 5.39 points (0.21%) from the previous day. On this day, KOSPI started rising due to expectations of a U.S. interest rate cut, but it widened its decline and fell to the 2560 level. KOSDAQ also closed at 739.51, up 6.31 points (0.86%) from the previous day. This is interpreted as the result of Samsung Electronics and SK Hynix, which have large market capitalizations in the domestic stock market, showing a downward trend.
On this day, SK Hynix fell as much as 11.12% during the day. The negative factor was that Morgan Stanley suggested an investment opinion of 'underweight' on SK Hynix on the 15th (local time) and lowered the target stock price from 260,000 won to 120,000 won. Samsung Electronics also lowered its target stock price from 105,000 won to 76,000 won.
Bitcoin also failed to show a surge. As of 3:30 p.m. on this day, Bitcoin recorded 82.78 million won on Upbit, a domestic virtual asset exchange, up 0.2% from the previous day. On Bithumb, it is being traded at 82.81 million won, up 3.18% from the previous day. In dollar terms, it was $62,082 on CoinMarketCap, a virtual asset market relay site, up 2.93% from 24 hours ago. It is the first time since the 28th of last month that the price of Bitcoin has exceeded $62,000.
Bitcoin's weak performance is interpreted as a result of concerns that the 'yen carry trade' may reappear. The yen carry trade is an investment method in which low-interest Japanese yen is borrowed and money is invested in high-interest currencies or high-yield assets such as bitcoin. In August, immediately after Japan's interest rate hike, a large number of investment funds through the yen carry trade were liquidated, causing the price of bitcoin to plummet.
The reason the market did not accept the Federal Reserve's "big cut" (0.5% point interest rate cut) for the first time in 4 years and 6 months as positive news is because of concerns that the Fed decided to cut interest rates due to an economic recession.
According to Lee Kyung-min, a researcher at Daishin Securities, “After entering the interest rate cut cycle, the key will be whether the current economic situation leads to a recession or a soft landing.” He added, “At this point, we believe a soft landing is highly likely, but given the lingering distrust in the economy and fears of a recession, we need time to verify the U.S. economy.”
