[Market View] ‘Blue Wave’ hits the stock market... Is KOSPI ‘Black Friday’ again?

With the New York stock market falling sharply last night as concerns persist about delays in data center construction in the aftermath of the 'blue wave' in which the Democratic Party won a landslide victory in the U.S. midterm elections, attention is focused on whether KOSPI, which plummeted the previous day, will be able to defend the 5,000 mark on the 6th.

However, attention is being paid to how much the counter-buying force following the previous day's sharp drop will be able to protect the index.

The previous day, KOSPI closed at 5,383.80, down 300.00 points (5.28%) from the previous trading day. It is the lowest level in 7 months since April 3 (5,337.30).

The KOSDAQ index also closed at 678.41, down 5.11%, falling to the 600s for the first time in about three months since July 30 (644.78).

During the sharp decline, a selling sidecar was activated on KOSPI and KOSDAQ. It has been 15 trading days since the 15th of last month that it was activated simultaneously in both markets.

As of the Korea Exchange's regular trading session (closed at 3:30 p.m.), foreigners sold net 3.4242 trillion won in the KOSPI stock market, continuing their 'selling' for the fifth trading day. Individuals and institutions made net purchases of 2.2721 trillion won and 845.6 billion won, respectively.

Including the aftermarket (4-8 p.m.), foreigners net sold 3.374 trillion won, while individuals and institutions net bought 2.1667 trillion won and 924.6 billion won, respectively.

As the Democratic Party won a landslide victory by taking control of the Senate and House of Representatives in the U.S. midterm elections, raising concerns about possible delays in data center construction and a subsequent slowdown in new orders from memory companies, stocks related to the AI ​​value chain, such as semiconductors and power devices, plummeted.

Due to these concerns, the three major New York stock market indices also fell sharply last night.

The Dow Jones Industrial Average fell 3.44% from the previous day, and the Nasdaq Composite Index and Standard & Poor's (S&P) 500 Index plunged 5.52% and 4.36%, respectively.

Today's decline in the Nasdaq and S&P 500 indices is the largest since April last year, when the New York stock market was shocked by U.S. President Donald Trump's announcement of mutual tariffs.

Seo Sang-young, a researcher at Mirae Asset Securities, explained, "While concerns about regulations on data center construction continue, the decline expanded as news of Microsoft (-3.58%) reconsidering its Neo Cloud contract was highlighted." He added, "Data construction delays, investment recovery, and financing risks were more reflected than the actual demand for artificial intelligence (AI), and the supply-demand imbalance in the options market served as a factor that expanded the decline."

Major memory companies such as SanDisk (-22.26%), Micron (-17.46%), and SK Hynix ADR (-13.40%), as well as AI-related stocks such as AMD (-17.26%), Intel (-10.33%), and Broadcom (-10.43%), showed double-digit declines.

Accordingly, the Philadelphia Semiconductor Index (-12.25%) plunged more than 12%, recording the largest drop since 2020, at the beginning of the COVID-19 pandemic.

Meanwhile, concerns over supply disruptions grew due to attacks on oil tankers in the Middle East, and international oil prices also rose to make matters worse.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) crude oil for December delivery closed at $90.52 per barrel, up 2.72% from the previous trading session, and the closing price of Brent crude oil futures for January delivery closed at $98.29 per barrel, up 3.88%.

According to the UK Maritime Trade Organization (UKMTO), at least five ships have reported attacks and other accidents in Gulf waters since the 1st.

Morgan Stanley Capital International (MSCI) Korea Stock Market Exchange Traded Fund (ETF) fell 13.46%, and MSCI Emerging Index ETF also fell 5.79%. The Russell 2000 index fell 4.45% and the Dow Transportation index fell 3.56%.

KOSPI 200 night futures fell by a whopping 7.87%.

However, there is a view that this sharp decline is seen as oversold.

Han Ji-young, a researcher at Kiwoom Securities, analyzed, "As Texas, which opposes data center regulations, accounts for about 27% of all data center construction in the United States, if construction in these regions is restricted, there is a possibility of negative ripple effects."

However, he said, "It should be noted that related regulations will appear relatively larger for projects in 2028 than next year. Given that the specific scope of regulations has not yet been confirmed, the collapse of AI stocks in the U.S. stock market is more than oversold. It should also be remembered that much of the controversy over profits in 2028 has already been reflected."