[Market View] Watching the results of the US midterm elections... Will KOSPI rebound on the strength of U.S. semiconductors?

On the 4th, KOSPI is expected to attempt a rebound from the previous day's plunge, thanks to the strength of US semiconductor stocks last night and expectations of an inflow of low-price buying forces.

The previous day, KOSPI closed at 5,648.79, down 210.29 points (3.59%) due to the plunge in technology stocks on the U.S. stock market.

The index started at 5,715.19, down 143.89 points (2.46%) from the previous day, and at one point fell 4.15% to 5,615.80.

In the stock market, foreign investors sold in trillions, pulling down the index.

At the close of regular trading, foreigners were net sellers of 1.5298 trillion won in the KOSPI market, and institutions also had a selling advantage of 514.7 billion won. Individuals made net purchases of 1.6644 trillion won.

Even including aftermarket transactions, foreigners had a selling advantage of 1.5244 trillion won, institutions had a selling advantage of 492.6 billion won, and individuals had a buying advantage of 1.6354 trillion won.

Oracle announced plans to issue stocks and bonds worth $20 billion to raise funds for building AI infrastructure, and Antropic plans to spend $895.4 billion on infrastructure purchases in the future, which appears to have further stimulated concerns about AI funding in the market.

In addition, as US technology stocks showed weakness ahead of the US midterm elections, with the wait-and-see mentality highlighted, large domestic semiconductor stocks Samsung Electronics [005930] and SK Hynix [000660] plummeted by 4.15% and 5.03%, respectively.

Meanwhile, the KOSDAQ index closed at 704.39, down 29.97 points (4.08%) from the previous day.

On the New York Stock Exchange last night, major technology stocks appeared to be rebounding from their recent decline. However, the three major stock indices showed mixed results due to caution about the U.S. midterm elections.

The Dow Jones Industrial Average fell 197.26 points (0.38%) from the previous day, but the Standard & Poor's (S&P) 500 Index and the Nasdaq Composite Index centered on technology stocks rose 0.36% and 0.83%, respectively.

By stock, memory semiconductor companies such as Micron (2.58%), SK Hynix American Stock Depositary Receipt (ADR, 2.09%), and SanDisk (4.78%) rebounded after continuing a downward trend day after day. CoreWeave (7.16%), a neocloud company that recently caused controversy over the credit crisis, was also strong.

The Philadelphia Semiconductor Index rose 2.63%.

Seo Sang-young, managing director of Mirae Asset Securities, explained, “The fact that Apple warned in its earnings announcement (the previous day) that the rise in memory prices could continue until next year served as a factor for suppliers to increase expectations of higher selling prices and improved profitability.”

However, this appears to have put a burden on Apple's (-1.90%) stock price. Among big techs, Nvidia (2.29%), Microsoft (2.74%), and Meta (2.36%) rose.

International oil prices fell on expectations of negotiations to end the war between the United States and Iran, Russia and Ukraine, stimulating investment sentiment.

On the London ICE Futures Exchange, Brent crude oil futures for delivery in January of next year fell 1.12% from the previous day, and on the New York Mercantile Exchange, U.S. West Texas Intermediate (WTI) futures for delivery in December fell 0.38%.

Meanwhile, the number of job openings in the U.S. in September exceeded expectations and reached the highest level in four months. The U.S. Department of Labor announced in its Job Recruitment and Turnover Report (JOLTS) released on the 3rd (local time) that the number of job openings in the U.S. in September was 7.523 million, an increase of 333,000 from the previous month.

Seo Sang-young, managing director of Mirae Asset Securities, said, “Concerns about instability in the employment market have eased, but stronger-than-expected indicator results have acted as a factor in raising government bond yields.”

Morgan Stanley Capital International's (MSCI) Korean stock market exchange-traded fund (ETF), which can gauge investment sentiment in the domestic stock market, rose 2.27%. The KOSPI 200 overnight futures index also rose 1.7%.

Accordingly, the domestic stock market is expected to have somewhat greater upside due to the influx of low-price buying forces following the previous day's plunge and the rebound in US semiconductor stocks last night.

Jiyoung Han, a researcher at Kiwoom Securities, predicted, “Despite the waiting sentiment for the U.S. midterm elections, the domestic stock market is expected to rebound on this day, thanks to the strength of major AI stocks and increased incentives to buy at low prices.”

One researcher pointed out, “KOSPI’s prior price-to-earnings ratio (PER) was 3.96 times, falling below 4 times for the first time since June 2000.”