The ASX 200 Index retreated in the last two consecutive days, while the AUD/USD exchange rate rose to the highest level in years after the latest Australian consumer inflation report. The index retreated to A$8,925 from the year-to-date high of A$8,990.

On the other hand, the AUD/USD exchange rate jumped to a high of 0.7010, its highest level since February 2023. It has jumped by over 18% from its lowest level in April last year.

Odds of RBA interest rate hike jump as Australian inflation jumps 

The ASX 200 Index dropped, and the AUD/USD exchange rate rose after the Australian Bureau of Statistics (ABS) showed that Australia’s inflation continued rising in December, raising the possibility that the Reserve Bank of Australia (RBA) will hike interest rates in the upcoming meeting.

The report showed that the headline CPI rose from 0% in November to 1.0% in December, higher than the analysts’ estimate of 0.7%. 

This growth led to an annual increase of 3.8%, higher than the November inflation of 3.4% and the median estimate of 3.6%.

More data showed that the quarterly trimmed mean CPI rose from 3% to 3.4%, while the weighted mean inflation rose to 3.6%. All these numbers are much higher than the RBA target of 2.0%.

The report came a week after the agency published strong jobs numbers. A report showed that the unemployment rate dropped to 4.1% as the economy created over 54.5k jobs. The participation rate rose to 66.7% from the previous 66.6%.

Therefore, a combination of strong job numbers and high inflation is conducive to an interest rate hike. This explains why Australian bond yields continued rising, with the ten-year yield rising to 4.89%, its highest level since November 2023. Also, the five-year yield rose to 4.47% from last year’s low of 3.416%.

An RBA interest rate hike would be highly bullish for Australian banks, which explains why their stocks continued rising. Top banks like Westpac, ANZ, Commonwealth Bank, and NAB have done well in the past few weeks.

ASX 200 Index technical analysis 

The daily timeframe chart shows that the ASX 200 Index has been in a strong uptrend in the past few weeks, moving from a low of $8,377 to a high of $8,985.

It has formed an ascending channel, and recently retested its upper side. A closer look shows that the index formed an evening star candlestick pattern. A morning star is made up of a small body, a small upper, and small lower shadow.

The Relative Strength Index (RSI) has continued moving downwards, moving from a high of 68 on January 26 to the current 63.

Therefore, the most likely ASX 200 Index forecast is bearish, with the next key support level being at $8,820, the lower side of the ascending channel.

AUD/USD forecast: Technical analysis 

The three-day timeframe chart shows that the AUD/USD exchange rate has been in a strong uptrend in the past few months, moving from a low of 0.5915 in April last year to a high of 0.7020.

It crossed the important resistance level at 0.6900, its highest level in September 2025. The pair has remained above the 50-day and 100-day Exponential Moving Averages (EMA).

It moved above the Ultimate Resistance level at 0.6835 and the overshoot level at 0.6958.  It also formed an inverse head-and-shoulders pattern.

Therefore, the most likely scenario is where the AUD/USD pair continues rising as bulls target the key resistance level at 0.7100.

The post ASX 200 Index and AUD/USD forecast as Australia inflation spikes appeared first on Invezz

The FTSE 100 Index continued its recent rally this week, helped by the ongoing bank and mining stocks gains. It jumped to a high of £10,208 on Tuesday, up by 35% from its April 2025 lows, as focus now shifts to the UK and Chinese relationship and the upcoming Bank of England decision.

Keir Starmer’s trip to China

The FTSE 100 Index continued rising this week as Prime Minister Keir Starmer traveled to China to meet President Xi Jinping.

Starmer, like Canada’s Mark Carney, is aiming to reset the trade relationship with Beijing as concerns about the reliability of the United States remain.

Market participants are anticipating some agreements that may benefit companies in the FTSE 100 Index during this trip. For example, it is likely that Chinese companies will place orders for Rolls-Royce engines and other products.

The other main catalyst for the FTSE 100 Index will come out later on Wednesday when the Federal Reserve concludes its first monetary policy meeting of the year. 

Economists are in agreement that the bank will leave interest rates unchanged between 3.50% and 3.75%. However, Jerome Powell’s press conference will have an impact on markets because it will be the first meeting since the grand jury subpoenas.

The FOMC decision comes a week before the Bank of England (BoE) delivers its first decision of the year. Economists expect the bank to leave interest rates unchanged after last week’s macro data.

The numbers showed that the country’s retail sales rose in December because of the Christmas season. Another report showed that the headline and core inflation remained steady above the BoE’s 2% in December last year. Therefore, the bank has no room to cut interest rates in this meeting. 

The FTSE 100 Index will react to the upcoming Magnificent 7 earnings, which will come out later today when companies like Microsoft, Meta Platforms, and Tesla release their earnings. While these are American companies, they often have an impact on global equities.

Lloyds Bank, the most actively traded company in the FTSE 100 Index will publish its financial results on Thursday, providing color about the banking sector. Its results come as UK bank stocks rise, with HSBC becoming the first European bank to hit a $300 billion market cap.

More FTSE 100 Index companies will publish their financial results next week. The most notable ones will be GSK, Shell, Unilever, and Beazley. Beazley’s numbers will be important as they come as Zurich continue its £7 billion pursuit.

FTSE 100 Index technical analysis 

The three-day timeframe chart shows that the FTSE 100 Index continued its strong rally this month and is now trading at its all-time high. It has jumped above the ultimate resistance level of the Murrey Math Lines tool at £10,000.

The index has jumped above the 50-day and 100-day Exponential Moving Averages (EMA), while the Relative Strength Index (RSI) has jumped above the overbought level.

Therefore, the most likely scenario is where the FTSE 100 Index continues rising, with the next key target being the extreme overshoot at £10,625.

The post FTSE 100 Index in focus as traders eye Starmer’s China trip, Fed, Lloyds Bank earnings appeared first on Invezz

HSBC share price continued its strong rally and is now sitting at its all-time high, with its market capitalization hitting $300 billion. It has become the sixth biggest bank in the world after JPMorgan, Bank of America, ICBC, Agriculture Bank of China, and China Construction Bank. This article explores whether the stock has more upside to go.

Why the HSBC share price has soared 

HSBC, a top European bank, has been in a strong uptrend in the past few years, moving from a low of 277p in 2021 to the current 1,277p. 

This surge has mirrored the performance of other European banks like Société Générale, UniCredit, Lloyds Bank, and Commerzbank.

This rally happened because of the relatively higher interest rates, which boosted its net income margin and income.  

Most importantly, the management has been implementing a turnaround strategy that has seen it exit some of its unprofitable markets with the goal of increasing its emphasis on the Asian market. As part of this growth, the company announced a major acquisition of Hang Seng Bank.

 It has exited its French, Canada, the United States, Greece, South Africa, Argentina, Uruguay, and Sri Lanka.

Additionally, the company is expanding its business in other areas, including wealth management, where it is aiming to become a major competitor to other companies like UBS and Morgan Stanley.

Additionally, the company has benefited from the ongoing cost-cutting measures as it seeks to save over $1.5 billion annually.

The most recent results showed that its business did relatively well even as it incurred some restructuring costs. Its profit before tax stood at $7.3 billion, down by $1.2 billion compared with Q3’24. The decline was because of its legal provisions of $1.4 billion.

HSBC’s revenue rose by $0.8 billion to $17.8 billion, while its net interest income (NII) jumped by $1.1 billion to $8.8 billion.

Analysts believe that the company will publish strong financial results in February. The management expects that its RoTE will be in the mid-teens, with the net interest income of $43  billion. They also expect that the company will give a more robust outlook as other companies have done.

Analysts see the RoTE coming in better than expected, with the management expected to raise its RoTE outlook by as much as 200 basis points.

HSBC stock price technical analysis 

The weekly chart shows that the HSBC stock price has been in a strong uptrend in the past few years, moving from a low of 277p in 2021 to the current 1,277p. Most recently, it has risen for eight consecutive weeks as demand rose.

The stock has remained above all moving averages. For example, with the stock trading at 1,277p, the 50-week moving average is at 985p, raising the possibility of a mean reversion in the coming weeks. Mean reversion happens when an asset moves back to its historical averages.

The Relative Strength Index (RSI) has continued rising and is now at the overbought level of 77. Similarly, the Percentage Price Oscillator (PPO) has continued rising this year.

Therefore, while the stock has more upside, chances are that the stock may retreat in the coming weeks and then resume the uptrend.

The post Here’s why the HSBC share price is in a strong bull run appeared first on Invezz

The USD/ZAR exchange rate continued its strong downward trend, reaching its lowest level since June 2022. It has dropped in the last eleven consecutive weeks as the South African rand surge gained steam. It is down by over 20% from its highest level in April last year.

USD/ZAR crashes amid the US dollar sell-off 

The USD/ZAR exchange rate continued its strong downward trend this week as the US dollar index (DXY) plunged to the lowest level in years. The dollar index, which tracks the performance of the greenback against other currencies, dropped to a lot of $96, much lower than other currencies.

Its crash intensified after Donald Trump said that he was comfortable with the ongoing sell-off, a view that he has maintained for years. Trump believes that a weaker US dollar benefits the country’s exporters by making their products cheaper abroad. He has also long-argued that other countries were taking advantage of the United States by devaluing their currencies.

The dollar sell-off intensified as the odds of a government shutdown continued rising on Kalshi and Polymarket platforms. Democrats have warned that a shutdown will happen because of the ongoing crisis on ICE and the Border Patrol.

Looking ahead, the next key catalyst for the USD/ZAR pair will be the upcoming Federal Reserve interest rate decision, which will happen later today. Economists polled by Reuters expect the bank to leave interest rates unchanged between 3.50% and 3.75%.

South African Central Bank decision 

The USD/ZAR exchange rate continued falling because of the ongoing political stability in South Africa as the deal between the ANC and the Democratic Alliance continued.

This deal has led to real change in the country, including significant improvements at Eskom, the country’s power utility company. As a result, the frequency of power outages has continued to drop in the past few months.

Credit ratings agencies have taken note and started to boost its outlook. All this has happened at a time when South Africa is in a trade conflict with the United States, a country that buys vast amounts of products.

The USD/ZAR exchange rate has also crashed because of the ongoing gold price surge. Gold is still one of the biggest South African exports 

Looking ahead, the South African Reserve Bank (SARB) will meet and deliver its interest rate decision on Thursday. Economists expect the bank to leave interest rates unchanged at 6.75%. 

The bank slashed interest rates by 0.25% in the last meeting, meaning that it has slashed six times since 2024. Economists at Goldman Sachs and Morgan Stanley believe that the bank has more room to lower its inflation outlook for the year. A top analyst said:

“While we see the case for a rate cut and view the decision as a relatively close call given the recent sharp rand appreciation, we think that the SARB would prefer to err on the side of caution and remain behind the curve in the cutting cycle.”

USD to Rand technical analysis 

The weekly timeframe chart shows that the USD/ZAR exchange rate continued its strong downward trend this week. It crossed the important support level at 17.07, its lowest level in September 2024.

The pair has remained below all moving averages, while the Relative Strength Index (RSI) and the MACD indicators have continued falling this year.

Therefore, the most likely scenario is where the pair continues falling in the near term, with the next key target being at the psychological level at 15. 

The post USD/ZAR forecast as South African rand rally gains steam ahead of Fed, SARB appeared first on Invezz

The Brazilian real continued its strong rally this week, reaching its highest level since May 2024 as the US dollar sell-off gained momentum. The USD/BRL exchange rate has dropped in the last five consecutive weeks and is down by 18% from its highest level since December 2024.

Brazilian real surges ahead of the central bank decision 

The USD/BRL exchange rate continued falling this week as investors waited for the upcoming Brazilian central bank decision, which will come out on Thursday morning.

The decision comes two days after the statistics agency published a strong inflation report. 

The report showed that the annual inflation rose in early January, with the headline figure rising 4.50%, slightly lower than the sector median of 4.52%. This increase was largely because of the rising food and beverage prices.

More data showed that inflation expectation has continued rising in the past few months, a move that will put pressure on the country’s central bank.

Economists expect that the central bank will leave interest rates unchanged at 15% for the second consecutive meeting. Before that, the bank hiked rates from a low of 10.5% in August 2024.

A survey released this week estimated that the bank will cut interest rates to 12.5% by the end of the year and an additional 275 basis points through 2029.

The Brazilian real has done better than expected despite the ongoing trade jitters between the United States and Brazil. Donald Trump implemented a large tariff on most goods coming from the country as he protested the arrest and jailing of President Bolsonaro.

On the positive side, the country has benefited from the ongoing trade conflict between the US and China. It is widely seen as a better alternative to the US in terms of agricultural exports to China.

Federal Reserve interest rate decision ahead 

The USD/BRL exchange rate continued falling as traders waited for the upcoming Federal Reserve interest rate decision.

Economists expect the bank to leave interest rates unchanged between 3.50% and 3.75%. It will be the first time that the bank has left rates unchanged in the last three meetings.

The most recent data showed that the US economy was doing well, with the GDP growth coming in at 4.4% in the third quarter. Inflation has largely stabilized, while the labor market has started to improve.

USD/BRL technical analysis

USDBRL chart | Source: TradingView

The weekly timeframe chart shows that the USD to BRL exchange rate has been in a strong bearish trend in the past few months. It has dropped from a high of 6.30 in 2024 to the current 5.18. 

The pair has recently crossed the important support at 5.2642, its lowest level in September and November last year. It has moved below the 50-week and 200-week Exponential Moving Averages (EMA).

The Percentage Price Oscillator (PPO) has remained below the zero line. Also, the Relative Strength Index (RSI) has dropped below 50 and is pointing downwards.

Therefore, the most likely scenario is where the pair continues falling, with the next key support being at 4.50. A move above the resistance level at 5.2642 will invalidate the bearish outlook,

The post USD/BRL forecast ahead of the Fed and Brazilian central bank decisions appeared first on Invezz

Seagate Technology stock price has gone parabolic in the past few months, helped by the ongoing demand for memory devices as the artificial intelligence industry (AI) boom accelerates. It jumped to a high of $350, up by 452% from its lowest level in April last year. This article explores what to expect ahead of its earnings.

Why Seagate Technology’s stock has soared 

Seagate Technology is an “old school” technology company that manufactures data storage devices for personal computers (PC) and data centers. It focuses on hard drives and solid-state drives that are found in most devices globally.

Seagate Technology stock price has soared in the past few months because of the ongoing boom in the artificial intelligence industry, which has led to a shortage that analysts expect will go on for months.

Its performance has mirrored that of other companies in the memory industry, including popular names like Kioxia, Micron, Sandisk, and Western Digital. Other companies in the industry, like SK Hynix, Samsung, and Toshiba have also done well.

The most recent results showed that the company’s revenue continued doing well in the third quarter. Its revenue rose to $2.62 billion from the previous $2.16 billion.

This growth was accompanied by its high margins, with its gross figure rising to 39.4% from the previous 32.9%. Also, its net income rose from $305 million to $549 million, while its earnings-per-share rose to $2.43.

READ MORE: Seagate tops S&P 500 with 146% surge in 2025: what’s driving the rally and should you buy?

STX to publish its earnings

The next important catalyst for the Seagate Technology stock will be its earnings, which will come out on Tuesday. Data compiled by Yahoo Finance showed that its revenue will come in at $2.75 billion, up by 18% from the same period in 2024. 

Seagate Technology’s earnings per share (EPS) is expected to come in at $2.84, up by 40% from the $2.03 it made in Q4’24. If these estimates are accurate, it means that its annual revenue will come in at $11.12 billion, up by 22% YoY. 

Analysts also expect that its annual revenue will jump to $13.2 billion, up by 18.7% on a YoY basis. This revenue growth will happen as demand for its storage solutions soar because of the AI boom and the ongoing PC refresh stage.

Still, it is unclear whether the Seagate Technology stock price will continue rising or not. Fundamentally, the stock has become highly overvalued; technically, it has become highly overbought.

Also, there is a risk that the memory industry will go through the boom and bust it is accustomed to.

Seagate stock technical analysis 

The daily timeframe chart shows that the Seagate Technology stock price has been in a strong uptrend in the past few months. It has formed an ascending channel and is now near the upper side.

The stock has remained above the 50-day and 100-day Exponential Moving Averages (EMA), while the Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have continued rising.

Therefore, there is a likelihood that the stock will pull back as sellers target the lower side of the channel at $300. However, a move above the upper side of the channel will point to more gains, potentially to the psychological level at $400.

The post Seagate Technology stock hits key resistance ahead of its earnings: buy or sell? appeared first on Invezz

The TSX Composite Index continued its strong bull run this year and is now hovering at its all-time high. It rose to a record high of $33,145, making it one of the best-performing indices globally. 

The blue-chip index, the TSX Index, rose by 32% in the last 12 months, beating the Nasdaq 100, which has jumped by 18.75% in this period. Also, the S&P 500 Index has jumped by 14.3%.

TSX Composite Index to react to Bank of Canada decision and gold prices 

The TSX Index will be in the spotlight this week as investors focus on the upcoming Bank of Canada (BoC) interest rate decision, which will happen on Wednesday this week.

Economists expect the central bank to leave interest rates unchanged at 2.25% in this meeting. A recent poll by Reuters found that rates will remain at this level this year as Canada’s economy has done well.

The most recent data showed that the economy expanded by 2.6% in the third quarter, while the labor market continued improving despite the ongoing jitters between the US and Canada.

Canada’s bond yields have continued rising in the past few weeks as traders waited for the upcoming BoC interest rate decision. The ten-year yield rose to 3.415%, while the five-year rose to 2.95%.

The TSX Composite will also react to the potential trade war between the United States and Canada. Donald Trump’ threatened to impose a 100% tariff on all goods coming from Canada in protest for a recent deal between the country and China. 

Canada lowered tariffs for electric vehicles imported from China from 100% to 6%, while China removed tariffs for Canada’s canola. 

A 100% tariff and retaliation from Canada would have a major implication for companies in the TSX Composite, which count the United States as their biggest customer. 

However, on the positive side, Canada’s Mark Carney has said the country was not working on a free trade deal with China. Most importantly, market participants are anticipating that TACO will happen.

TACO stands for Trump Always Chickens Out, a phenomenon where he makes big claims and then caves. For example, Trump was fixated on the Greenland issue for weeks, only for him to come up with an underwhelming deal at the World Economic Forum last week.

The other important catalyst for the TSX Composite Index is the ongoing previous metal rally. Gold price jumped to a record high of $5,000 on Monday, while silver has moved above the key resistance level at $100. 

The soaring precious metal price surge is a bullish thing for the index because many of its constituent companies are in the industry. SilverCorp Metals stock has jumped by 50% this year, while First Majestic, Endeavour Silver, New Gold, Denison Mines, Discovery Silver, and Aya Gold & Silver have soared by 34%. All these companies have jumped by triple digits in the last 12 months.

Some major companies in the TSX Composite Index will publish their financial results this week. The most notable ones are companies like Metro, CGI, Rogers Communications, Canadian National Railway, and Imperial Oil.

TSX Index technical analysis 

The daily timeframe chart shows that the TSX Composite Index has been in a strong uptrend in the past few months. It has jumped above all moving averages, while the Relative Strength Index (RSI) and the MACD have continued rising.

Therefore, the most likely TSX Index forecast is bullish, with the next key resistance level to watch being at $34,000. A drop below the key support at $32,500 will invalidate the bullish outlook.

The post Here are the top catalysts for the TSX Composite Index this week appeared first on Invezz

The IBM stock price remains under pressure this month as investors focus on the upcoming financial results. It retreated to $292.45, a few points below the 2025 high of $325. It has formed a relatively bullish pattern, pointing to more gains in the coming weeks.

IBM stock price technical analysis 

The three-day chart shows that the IBM share price has remained in a narrow range in the past few weeks. On the positive side, the stock has remained above the 50-day and 100-day Exponential Moving Averages (EMA).

Most notably, the stock has formed a bullish flag pattern, which happens after a big jump, which is then followed by a horizontal or descending channel. 

The stock also remains above the Supertrend indicator, which is a common bullish continuation pattern in technical analysis.

Therefore, the most likely scenario is where the stock rebounds and hits the upper side of the flag pattern at $312. A move above that level will point to more gains, potentially to the next psychological level at $400.

On the flip side, a drop below the key support level at $280 will invalidate the bullish IBM stock forecast and point to more downside in the near term.

IBM stock price chart | Source: TradingView 

International Business Machines to publish its earnings this week 

IBM, commonly known as the Big Blue, will be in the spotlight this week as it publishes its financial results on Wednesday. 

These results will come a month after the company announced its Confluent buyout in a deal valued at over $11 billon. Its buyout will help it strengthen its enterprise AI solution by adding Confluent’s data streaming solutions. 

Wall Street analysts believe that IBM’s business continued doing well as demand for its solutions rose. The average estimate is that its revenue rose by 9.43% in the fourth quarter to $19.2 billion. That figure will bring its annual revenue to over $67 billion, while its earnings per share (EPS) moved from $10.3 to $11.35. 

The most recent results showed that IBM’s revenue rose by 9% to $16.3 billion. This revenue was driven by its infrastructure business, whose sales rose by 17%. Its software revenue rose by 10%, while its consulting jumped by 3%. 

IBM’s consulting business is benefiting as companies assess ways to introduce generative AI into their businesses. It helps them to design and implement these solutions. 

The company has become a major player in the automation, hybrid cloud, and hybrid infrastructure solutions. It ended the quarter with over $14.9 billion in cash and marketable securities and over $63 billion in debt. Wall Street analysts have a hold rating on the stock. The average IBM stock forecast among analysts is $305, up slightly from the current $292. The most recent rating came from JMorgan, who maintained its outlook for the stock from $290 to $312. Other analysts from companies like Stifel, Bank of America, Evercore, and Wedbush.

The post IBM stock price eyes a parabolic move ahead of its earnings appeared first on Invezz

Rheinmetall share price has lost momentum in the past few months as the rally that happened a few months ago faded. RHM stock was trading at €1,830, down from its all-time high of €2,000. It has also formed the risky triple-top pattern pointing to more downside despite its revenue growth.

Rheinmetall share price technicals points to a reversal

The three-day timeframe chart shows that the RHM stock price peaked at €2,005 as the bull run happened. A closer look shows that it has formed a triple-top pattern at €2,000 and a neckline at €1,416, its lowest level on December 1. 

A triple-top is one of the most popular bearish reversal patterns in technical analysis. It normally signals that bulls are hesitant of placing bids above the triple-top level. 

Therefore, the stock will likely retreat, potentially to the neckline at €1,416, down by 22% below the current level. A drop below that price will point to more downside, pointing to more downside, potentially to the psychological level at €1,200.

On the positive side, there is a likelihood that the stock could be forming an inverted head-and-shoulders pattern, which often leads to more upside in the near term. A move above the all-time high of €2,005 will point to more gains, potentially to the key resistance level at €2,500.

Rheinmetall’s business is thriving as it seeks to build a Starlink rival

Rheinmetall, the biggest European defense group in Europe, is doing well, with its revenue and backlog, and the management hopes to continue this growth in the coming years.

The management is working with OHB to build a product that will compete with Elon Musk’s Starlink as it seeks to take advantage of Berlin’s €35 billion budget for military space technology. 

Its goal is to create a secure, military-grade satellite communications network in low Earth orbit (LEO) for the German government. This is happening as the company continues to become a major player in the defense industry.

Rheinmetall is benefiting from the ongoing defense spending in Europe, where countries are seeking to end their resilience from the United States. 

The European Union has already created a €150 billion defense fund known as Security Action for Europe (SAFE). This fund allows EU member countries to borrow to invest in defense equipment made mostly in Europe. Most importantly, analysts believe that Europe could spend as much as €14 trillion in defense and related infrastructure in the next decade.

Rheinmetall’s revenue and profitability have continued growing in the past few years. The most recent results showed that its backlog jumped to €64 billion, and the management predicted that it ended the year at €80 billion. This growth will accelerate this year as defense spending continues rising.

Rheinmetall’s sales rose by 20% in the first nine months to €7.5 billion, with most of this growth coming from its defense business. Its operating result rose from €705 million to €835 million, while its operating cash flow rose to €813 million.

A major challenge for the company is that it has become highly overvalued, with the price-to-earnings (PE) ratio rising to between 95 and 100, much higher than other defense companies like BAE Systems, RTX, and Lockheed Martin.

The post Rheinmetall share price wavers as it seeks to challenge Elon Musk’s Starlink appeared first on Invezz

The KOSPI Composite Index continued its remarkable rally, reaching its highest level on record as the AI boom continued and the frenzy among investors accelerated. It also jumped despite the renewed tariff threat from the United States. It has soared by over 121% from its lowest level this year.

KOSPI Composite Index jumps despite the tariff threat 

South Korean stocks have been in a strong uptrend in the past few months as demand from investors gained steam. The rally was supercharged last year when the country’s president predicted that the KOSPI Index would jump to KRW 5,000, up from KRW 2,100 at the time.

The index rallied on Tuesday even after Donald Trump announced that he was considering imposing a 25% tariff on all goods from South Korea. He cited the fact that the country’s parliament had failed to codify the deal he reached last year with the government.

The president said that new tariffs will apply to all goods shipped from South Korea, including lumber, autos, and pharmaceutical products. These tariffs would hit top companies like Hyundai, LG, and Samsung. Hyundai sold over 1.1 million vehicles to the United States in 2024.

Donald Trump and his South Korean counterpart reached an agreement that slashed the reciprocal tariffs to 15%. South Korea also pledged to invest billions of dollars in the United States. 

Most recently, a report by Bloomberg noted that the country would delay implementing the investment to the United States because of the fears of capital outflows and currency volatility.

READ MORE: Here’s why the Kospi Composite Index is in an unstoppable bull run

One potential reason why the KOSPI Composite Index is soaring is the concept known as TACO, which stands for Trump Always Chickens Out.

It simply meant that Trump often makes statements that he never follows through on. For example, he recently threatened to take over Greenland and then stepped back, receiving a deal that has always existed.

Looking ahead, the next key catalyst for the KOSPI Composite Index this week will be the upcoming Samsung Electronics earnings, which are scheduled for Thursday. These results will provide more color on its business amid the ongoing AI boom.

The KOSPI Index also rose amid rising optimism that the central bank will deliver a dovish policy statement after a recent report showed that the economy contracted in the fourth quarter. 

The top gainers in the index are companies like Kumho Electric, DYP, Hyosung TNC, Hannong Chemicals, and Hyundai Motor.

KOSPI Index technical analysis 

KOSPI Composite Index chart | Source: TradingView 

The daily timeframe chart shows that the KOSPI Composite Index has rebounded in the past 12 months. It jumped from a low of KRW 2,276 in April last year to the current KRW 5,045.

The index has remained above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls remain in control for now.

The Relative Strength Index (RSI) and other oscillators like the MACD and Stochastic continued rising. Therefore, the index will likely continue rising as bulls target the key resistance level at KRW 5,200.

The post Here’s why the KOSPI Index soared to ATH after Trump’s tariff threat appeared first on Invezz