Will the fear of ‘AI season off’ subside? KOSPI surges amid still concerns

The domestic stock market began a sharp rebound as investment sentiment for artificial intelligence (AI) and semiconductor stocks, which had faced rapid corrections after the U.S. Democratic Party's landslide victory in the midterm elections (blue tsunami), revived.

It is showing a strong upward trend in the 3% range, breaking away from the precarious appearance of shaking while doing chin-ups at '5,000 blood'. Foreigners, who had been net selling for 7 consecutive trading days until the previous day, also turned into 'buyers' on this day.

According to the Korea Exchange and Yonhap Infomax, a financial information service provider, on the 10th, as of 10:32 am on this day, KOSPI is showing 5,212.48, up 3.86% from the previous day.

The index started at 5,247.22, up 4.55%, and at one point soared to 5,300.92 (+5.62%) before giving back some of the gain.

Samsung Electronics [005930] and SK Hynix [000660], which rank first and second in market capitalization in the domestic stock market, are leading the rise in the index, surging 4.69% and 5.28%, respectively.

KOSDAQ also showed an increasing trend after opening at 661.73, up 3.56%.

Accordingly, purchase sidecars were activated one after another at 9:06 and 10 a.m. in the stock market and KOSDAQ market, and the program buy call was suspended for 5 minutes.

After 8 trading days, foreigners are net buying 165.6 billion won in the stock market. While institutions also have a buying advantage of 238.2 billion won, individuals alone are net selling 532.8 billion won.

Stock markets in major Asian countries are also strong.

Japan's Nikkei 255 index rose 2.68% to 60,350.91, and Taiwan's stock index rose 3.32% to 43,043.61.

While voices of reflection are rising that concerns that regulations related to the construction of AI data centers could be greatly strengthened under the leadership of the US Democratic Party following the 'blue tsunami' have been excessive, the atmosphere of a large surge in technology stocks on the New York Stock Exchange last night appears to have also acted as a warm wind in the stock markets of major Asian countries, including Korea.

The Dow Jones Industrial Average rose 2.15%, and the Standard & Poor's (S&P) 500 Index and Nasdaq Composite Index rose 2.35% and 2.74%, respectively.

In particular, the Philadelphia Semiconductor Index soared 6.86% as low-price buying power flowed into AMD (13.26%), Broadcom (8.78%), Marvell (9.49%), and Micron Technology (6.25%).

It is interpreted that the selling trend has calmed down for the time being, with support given to the diagnosis that the supply-demand shock caused by the rapid rebalancing of hedge funds, which had excessively increased the proportion of related stocks, caused the excessive plunge, rather than fundamental factors such as corporate performance or industry conditions.

It was also positive that international oil prices fell sharply in the 4-5% range as U.S. President Donald Trump, who is in a lame-duck crisis due to a crushing defeat in the midterm elections, mentioned that it was highly unlikely that he would launch a large-scale additional air strike against Iran.

The rise in international oil prices due to the US-Iran war has pushed up prices and bond interest rates and has raised doubts about whether Big Tech's cut-throat competition in AI infrastructure investment can be maintained in the future, but the burden related to this has been eased.

Jiyoung Han, a researcher at Kiwoom Securities, said, “Market opinions are converging that there is not a high possibility that the (US) Democratic Party will strengthen data center regulations after the midterm elections. Considering that geopolitical instability from the Middle East is also easing, I think it is right to open up the possibility that the market’s sensitivity to negative factors that have caused instability in the stock market since last October will decrease.”

The problem is that market participants still have doubts about the stock market's resilience due to the shock of the serial crash.

In particular, in the case of the Korean stock market, many individual investors are in the loss zone due to the aftermath of the plunge in July, and institutions, including pension funds, have also suffered from a supply and demand gap that limits their purchasing power.

This means that for a steady rebound in the domestic stock market, improvement in foreign supply and demand is urgently needed.

Foreigners net sold an average of 1.7929 trillion won per day in the stock market over 7 trading days from the 30th of last month to the 9th of this month, but the previous day, the net selling amount decreased to 500 billion won, but on this day, it changed to 'buy'.

However, the net buying scale is not large, and the general view of the securities market is that it is too early to say that foreigners have completely turned to 'Buy Korea'.

Lee Gyeong-soo, a researcher at Hana Securities, said in a recently published report that KOSPI's foreign selling trend has continued for more than 10 months and has become quite entrenched, and that "a KOSPI rebound and a return to foreign net buying may be possible after at least three months."

The imminent IPO of Antropic, a leader in the development of frontier AI models, appears to have an impact on the supply and demand of large-cap semiconductor stocks by foreigners in the short term.

According to foreign media such as the Wall Street Journal (WSJ), Antropic aims to start trading under the stock code (ticker) 'ANT' on the NASDAQ market on the 19th or 20th.

The size of the public offering could be around $100 billion, making it the largest ever. Ahead of such a large-scale IPO, it is common for the stock price of the leading stock to weaken for a month or two due to the demand for securing ammunition (cash) before subscription.