"Retail investors who bought during panic are the winners"…KOSPI expected to rise on tailwind from New York [Preview of today's market]

Last night, the New York stock market shook off concerns of an artificial intelligence (AI) bubble and managed to rebound. In particular, Micron, the third-largest memory semiconductor maker after Samsung Electronics and SK hynix, surged sharply, raising expectations that domestic semiconductor stocks will also benefit.

The KOSPI index closed at 4004.42, down 2.85% on the 5th. Foreign investors net sold 2.5183 trillion won that day to realize profits. Institutions also recorded a net selling bias of 79.4 billion won, while individual investors alone net bought 2.5657 trillion won, pushing the KOSPI, which had fallen to 3867.81, back above the 4,000 level.

Lee Kyung-min, a Daishin Securities researcher, said, "Concerns about an AI bubble and valuation (price level relative to earnings) pressure have cooled the AI rally that had been driving market gains," adding, "In particular, the KOSPI had continued a record-high rally without a price adjustment recently, increasing profit-taking pressure."

However, he diagnosed, "This is a short-term cooling of overheating following the recent sharp rise rather than a trend reversal, and there is judged to be no change in fundamentals. From a medium- to long-term perspective, the AI and tech stock momentum has not been broken."

At the overnight New York market, major indices all fell centered on AI-related tech stocks. The S&P 500 index finished up 0.4%, the Nasdaq Composite index up 0.7%. The Dow Jones Industrial Average also rose 0.5%. Nvidia and Palantir fell 1.8% and 1.4% respectively, but Micron jumped 8.9%.

The rise that day was attributed to stronger private employment data and inflows from bargain hunting. With the U.S. federal government shutdown (temporary suspension of operations) delaying official government economic data releases for more than a month, Automatic Data Processing (ADP) announced that private-sector employment in the U.S. increased by 42,000 in October compared with the previous month.

Employment, which had fallen for two consecutive months, turned to an increase and the increase exceeded market forecasts, easing market concerns that the labor market was cooling rapidly. The U.S. Supreme Court also drew investors' attention by holding oral argument procedures related to the legality of the Trump administration's imposition of tariffs that day.

Han Ji-young, a Kiwoom Securities researcher, advised, "Judging from the tone of the U.S. market, heavily sold leading stocks such as semiconductors, defense, power equipment and shipbuilding are likely to rebound," adding, "Volatility is likely to remain high for the time being, so attention should be paid to risk management."

Maeng Jin-gyu, reporter maeng@hankyung.com