KOSPI 'flutters' due to AI credit concerns... Take a breather at the good news from Hynix (comprehensive)

(Seoul = Yonhap News) Reporter Kwak Yun-ah = KOSPI fluctuated greatly during the day on the 23rd, fluctuating between the 5,300 and 5,500 levels.

Although it barely rebounded thanks to the good news from SK Hynix, which included the suspension of consideration for Solidim's listing, the market is expected to remain unstable for the time being as investment sentiment related to artificial intelligence (AI) has recently been shrinking.

According to Yonhap Infomax, a financial information company, the intraday fluctuation range (high to low) of the KOSPI index on this day was 244.32 points.

KOSPI fell 4.12% to 5,305.98 just 10 minutes after opening today. The intraday low fell to the lowest since July 29 (5,262.77).

However, during the day, SK Hynix [000660] and Samsung Electronics [005930] succeeded in rebounding, and the index also changed direction, and closed at 5,550.30, up 0.3%, the highest intraday increase.

Last night, the New York stock market was reeling from fears that AI credit instability could spread to Big Tech, and KOSPI also showed a strong decline in early trading.

Although Meta revealed its intention to increase AI investment, its cash flow deteriorated in the third quarter and even announced plans to issue new shares to raise funds, which stimulated concerns about a 'funding bottleneck'.

As investment sentiment plummeted, technology stocks such as NVIDIA (-4.4%), Micron (-6.3%), and Intel (-8.0%) fell, and the Nasdaq Composite Index plunged 2.6%, the largest drop since June.

Meta's 5-year credit default (CDS) premium jumped by about 7bp (1bp = 0.01% point) in one day, reaching an all-time high, adding to credit instability. This means that the market saw a high possibility of Meta’s default risk.

To make matters worse, NVIDIA's CEO Jensen Huang said at the company's developer conference GTC that there was a large demand for AI infrastructure, but pointed out that "the problem is scarce capital," which became bad news.

KOSPI closed the day before with a drop of more than 3%, reflecting concerns about Meta's funding.

However, due to the semiconductor-centered nature of the market, it appears to have been weak in the early part of the day as it is more vulnerable to AI credit instability.

However, SK Hynix's suspension of review of Solidigm's listing became a relief pitcher.

SK Hynix started down 1.9% and at one point increased its decline to 4.3%, but managed to rebound during the day and finished strong at 4.42%.

Samsung Electronics also contributed to the index's rebound by turning upward just before the market closed and closing strong by 0.47%.

In particular, institutional investors net purchased approximately KRW 596.1 billion of SK Hynix and KRW 134.8 billion of Samsung Electronics, driving the stock price rebound.

KOSPI rebounded on this day as the uncertainty surrounding Solidigm's listing was resolved, but volatility is expected to be high for the time being as concerns surrounding AI value chain investment remain.

The macro situation is also not good. As Yemen's pro-Iran rebels Houthi announced that they had attacked major facilities in Saudi Arabia again, Brent crude oil futures soared 4% and West Texas Intermediate (WTI) crude oil rose 2.4% overnight.

The 18bp drop in U.S. 2-year and 10-year U.S. interest rates overnight is interpreted as a movement of funds to safe assets due to instability in the Middle East and Europe and concerns about AI credit, and is negative news for the stock market.