As the market is driven into extreme fear due to the effects of the tariff wars from the Donald Trump administration, there are projections that logic such as valuation lows may not apply. This implies that the stock index could fall further.
Research Institute of SK Securities analyst Jo Jun-ki assessed that as another sell-off occurs centered around the Nasdaq index in the U.S. stock market, there is a high probability that the domestic stock market will start on a grim note on the 7th.
He noted that "it is hard to view the market as rational, and the logic of valuation lows may not operate. Since the issues cannot be resolved neatly in the short term, if additional noise occurs, the declines could be more significant, and even if there is a rebound, it likely won't be substantial."
However, analyst Jo noted that it is also reasonable that concerns regarding the implementation of tariffs have been significantly reflected in stock prices already. The Standard & Poor's 500 index and the Nasdaq Composite index have fallen by 17% and 23%, respectively, compared to this year's peak. Various technical indicators, including the Volatility Index (VIX), have also entered oversold territory.
Jo emphasized, "While additional declines may occur, leading to more assessment losses, I believe that executing slow partitioning in purchases will yield a higher profit-loss ratio," and he warned that using an unmanageable level of leverage should be avoided during this process.