[Good Morning Stock Market] Five Straight Sessions of Sharp Losses... Can Bargain Hunting Spark a Rebound?

Caution ahead of U.S. inflation data; China semiconductor concerns
"South Korea should focus on potential for a medium-term index recovery"

With domestic and international artificial intelligence (AI)-related stocks facing headwinds, including concerns that Chinese memory semiconductor maker ChangXin Memory Technologies (CMXT) is catching up technologically and debate over investment profitability, the South Korean stock market is expected to attempt a rebound on the 14th, supported by bargain hunting after recent sharp declines.

On the New York Stock Exchange on the 13th (local time), the Dow Jones Industrial Average closed at 51,670.10, down 180.45 points (0.35%) from the previous session. The S&P 500, which is dominated by large-cap stocks, fell 1.79 points (0.02%) to 7,805.45, while the Nasdaq Composite, which is dominated by technology stocks, lost 41.52 points (0.15%) to close at 27,204.38.

Traders work at the New York Stock Exchange in New York, U.S. Reuters-Yonhap News

Among individual stocks, SK hynix ADR fell 3.19%, Western Digital dropped 1.61%, and Micron Technology declined 3.62%. Seagate Technology, down 0.80%, and SanDisk, down 0.34%, also fell. Concerns about competition following news of CXMT's technological progress and uncertainty over the outlook for AI investment appear to have weighed on the semiconductor sector as a whole.

However, major indexes rebounded from their intraday lows late in the session after remarks by John Williams, president of the Federal Reserve Bank of New York, were reported. In an interview with Bloomberg News that day, he said, "At this point, I don't see a reason to raise rates further next year," while maintaining his view that one additional rate hike this year would be appropriate.

Han Jiyoung, a researcher at Kiwoom Securities, said, "The environment remains challenging, particularly for the semiconductor sector." However, she noted, "Concerns such as Chinese memory makers significantly expanding their market share and weak earnings from AI-related stocks have yet to materialize. We should focus on the fact that earnings season, which could help restore investor sentiment, is approaching."

She said, "Despite sentiment ahead of the September U.S. Consumer Price Index (CPI) report and semiconductor-related concerns stemming from China, comments from Federal Reserve (Fed) officials leaning toward monetary easing helped narrow the U.S. market's intraday losses." She added, "The South Korean stock market is expected to rebound today, supported by bargain hunting following consecutive sharp declines over the past five trading days."

Han added, "At this point, rather than taking a defensive approach such as 'joining the selling momentum when prices fall' or 'selling into a short-term rebound to raise cash,' it would be more appropriate to focus on the possibility of a medium-term recovery in the indexes by maintaining existing positions or increasing exposure through staggered purchases."

This content was produced with the assistance of AI translation services.