KOSPI rebounds 'successfully' due to low price buying... Semiconductor stocks still ‘cautious’ (comprehensive)

(Seoul = Yonhap News) Reporter Kwak Yoon-a = The market appears relieved as the KOSPI index closed higher on the 19th despite concerns about the profitability of artificial intelligence (AI) investments that resurfaced over the weekend.

It is expected that a highly volatile market will continue for the time being, amidst the upward momentum that now is an opportunity to buy at low prices after experiencing a slump in the market, and the downward pressure that concerns about AI profitability remain.

According to the Korea Exchange, the KOSPI index started off sharply lower by more than 3% on this day, but managed to rebound during the day, and later increased the amount of increase, closing at 5,768.01, up 1.76%.

Considering that there was a cloud of war in the market before the opening due to concerns about 'Black Monday', the KOSPI index is evaluated to have performed relatively well on this day.

On the 16th local time, the Nasdaq Composite Index fell 2.15% due to a sharp drop in NeoCloud and semiconductor stocks, and the Philadelphia Semiconductor Index also fell for 8 consecutive trading days.

Accordingly, the prevailing view was that the KOSPI would not be able to avoid a significant decline, but since then, the perception that the decline was excessive has spread, and low-price buying appears to have flowed in.

KOSDAQ started down 2.7%, but turned upward and closed at 808.89, up 1.78%.

In the stock market, while foreigners' selling intensity weakened, pension funds defended the index by increasing their buying power.

Foreigners, who had a buying advantage in the early days of the market, switched to net selling during the day and recorded net selling of KRW 35.9 billion as of the close of regular trading.

Considering that there was an average daily net selling of 2.2414 trillion won over the past week, the intensity of selling has decreased significantly.

Institutions had a buying advantage of 574.1 billion won, of which pension funds were net buyers of 215.3 billion won. This is the largest net purchase since the 11th of last month. Individuals net sold 1.0874 trillion won.

Even compared to major Asian stock markets such as Japan's Nikkei 225 average stock price (-0.62%) and Taiwan's stock market index (-0.61%), KOSPI showed a good trend on this day.

KOSPI fell by more than 14% in the past week alone, which appears to have been an effect of highlighting its price appeal.

After experiencing a slump in the market, the KOSPI index's forward price-to-earnings ratio (PER) as of the 15th fell to 4.2 times, falling to the lowest level since 2000.

This means that the stock price is lower than the profits the company is expected to earn, and the prevailing analysis is that this level is extremely undervalued.

Jiyoung Han, a researcher at Kiwoom Securities, said that a period of high volatility is expected for the time being, but said, “It is true that most major industries such as semiconductors and IT hardware are in an oversold phase in terms of stock prices, so the incentive to buy at low prices is high.”

However, if you look at the stock price trend on this day, you can still sense a cautious atmosphere in the market surrounding the profitability of AI investment.

This is because semiconductor stocks failed to show a refreshing rebound, with Samsung Electronics [005930] and SK Hynix [000660], which fell at record levels last week, rising only 1.16% and 0.39%, respectively.

According to the Korea Exchange, foreigners made a net purchase of 171.7 billion won in Samsung Electronics on this day, and a net sale of 218.1 billion won in SK Hynix.

This is because, amidst a series of negative news from China, such as Changshin Memory's technological catch-up and Deepseek's launch of low-cost, high-performance new products, concerns about the profitability of AI investment, such as Coreweave's credit default swap (CDS) premium surge and Antropic's sales expectations, are not going away.

Concerns about the profitability of AI investment continue to be raised throughout the industrial and financial world, including CEOs of Intel and Broadcom, as well as Blackrock CEO Larry Fink and Goldman Sachs.

Even though there is no evidence that the AI ​​industry itself has been substantially damaged, some analysts say that investment should be cautious for the time being as the market reacts sensitively to anxiety.

In this situation, there is also a prediction that it will be difficult to easily buy at a low price just by looking at the price attractiveness of KOSPI.

Heo Jae-hwan, a researcher at Eugene Investment & Securities [001200], said, “As high interest rates continue for a long time, investors’ expectations have risen, and financing has become more difficult,” adding, “Some slowdown in AI facility investment seems inevitable.”

He then pointed out, “KOSPI appears to be in the split purchase zone, but it seems like we should approach it conservatively.”