Hyundai Motor Securities: "KOSPI Rebound Expected After Mid-November"

Full-fledged rebound expected after major events, including U.S. midterm elections and Anthropic’s IPO

Hyundai Motor Securities identified the period after mid-November, when major events such as the U.S. midterm elections and the IPO of AI company Anthropic have concluded, as the point when a full-fledged rebound in South Korea’s stock market could begin.

Researcher Kim Jaeseung of Hyundai Motor Securities said at a briefing held at the Korea Exchange in Yeouido, Seoul, on October 27, “Investor sentiment in South Korea’s stock market could pick up from mid-to-late November.”

“We expect foreign investors to return to South Korea’s stock market after seeing the outcomes of events such as the U.S. midterm elections, Anthropic’s listing, and the Asia-Pacific Economic Cooperation (APEC) summit to be held in China next month,” Kim said. “There is a possibility of a year-end rally.”

He said, “Investors are taking a wait-and-see approach because, although the likelihood has increased that the Democratic Party will become the majority party in both the House and the Senate in the U.S. midterm elections on November 3, the actual outcome is difficult to predict.” He also explained, “Ahead of Anthropic’s listing, global funds may sell existing holdings to secure investment capital.”

Hyundai Motor Securities also expects domestic financial conditions to improve if the U.S. Democratic Party wins a majority in both chambers of Congress, a scenario known as a “blue wave.” Researcher Choi Jemin of Hyundai Motor Securities, who also presented at the briefing, said, “A blue wave would reduce the risk of the U.S. administration of President Donald Trump unilaterally expanding tax cuts or fiscal spending.” The company expects this could ease inflationary pressures and the likelihood of further interest rate hikes, while reducing upward pressure on interest rates, the dollar, and oil prices, creating a more favorable environment for domestic financial conditions.

He emphasized, “The KOSPI’s seasonal weakness in September stems from supply-and-demand factors and a concentration of events, not a deterioration in fundamentals. Investors should look for a year-end rally after the U.S. midterm elections and use this as a buying opportunity.” He noted in particular that, since 1975, the KOSPI’s average return in the three months after Election Day in U.S. midterm election years has been 2.9%, while its average return over six months has been 10.9%.

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