[Good Morning Stock Market] US Semiconductor Sell-off Calms... KOSPI Attempts Rebound

On the 19th, the KOSPI is expected to attempt a rebound, supported by strong earnings from TSMC and a recovery in Nvidia. As issues related to the U.S. presidential election subside and market focus shifts to earnings, a sector-driven market is anticipated, with capital flowing into stocks with continued earnings expectations such as defense, shipbuilding, and construction.

On the 18th (local time), the New York stock market closed lower across the board. At the New York Stock Exchange (NYSE), the blue-chip-focused Dow Jones Industrial Average fell 533.06 points (1.29%) from the previous trading day to close at 40,665.02. The large-cap S&P 500 index also dropped 43.68 points (0.78%) to 5,544.59, and the tech-heavy Nasdaq index declined 125.7 points (0.7%) to close at 17,871.22. With growing expectations for a rate cut in September, investors appear to be rotating from large tech stocks to small and mid-cap stocks, continuing the downward trend in tech stocks.

Han Ji-young, a researcher at Kiwoom Securities, analyzed, "The weakness in tech stocks reflects some profit-taking after the rally, along with movements considering the upside risk of cyclical stocks, which had been lacking in supply and demand. The AI investment theme remains valid, supported by the Nasdaq's rebound attempt following TSMC's strong earnings, Nvidia's recovery, and profit-taking in cyclical stocks."

Earlier, TSMC announced on the 18th that its Q2 revenue rose 40% year-on-year to NT$673.51 billion (approximately KRW 28.5 trillion). Net profit was NT$247.8 billion (about KRW 10.5 trillion), up 36% from the same period last year. These results exceeded the average analyst estimates compiled by market analysis firm LSEG (revenue NT$657.5 billion, net profit NT$236.1 billion).

On this day, the KOSPI is expected to attempt a rebound, fueled by Nvidia's recovery and TSMC's strong earnings. The researcher noted, "After TSMC's earnings announcement during the previous trading session, Samsung Electronics, which had plunged 3%, reversed to an upward trend, partially recovering the index's decline. Additionally, TSMC's conference call statement that there would be no change in its U.S. and Japan business expansion strategies despite former President Donald Trump's remarks on Taiwan semiconductors is likely to act as a relief factor."

On the other hand, some opinions suggest cautious approaches due to continued weak investor sentiment. Kim Ji-won, a researcher at KB Securities, said, "Among the 11 sectors in the S&P 500, 10 were weak, and the profit-taking desire that had been concentrated in tech stocks has spread across sectors. While TSMC's earnings confirmed strong demand for AI chips, investor sentiment remains subdued, so a cautious approach is necessary."