[Good Morning Stock Market] AI, Rate Cuts, and Tariff Optimism Fuel KOSPI's Record-High Rally

On September 16, the domestic stock market is expected to open higher, buoyed by momentum from the United States in artificial intelligence (AI) and optimism over improved U.S.-China relations.

Previously, on September 15 (local time), the New York stock market closed higher across the board, driven by expectations of a Federal Open Market Committee (FOMC) rate cut and progress in U.S.-China trade negotiations. The Dow Jones Industrial Average, centered on blue-chip stocks, rose 49.23 points (0.11%) to 45,883.45. The S&P 500 Index, focused on large-cap stocks, increased by 30.99 points (0.47%) to 6,615.28. The Nasdaq Index, dominated by technology stocks, jumped 207.647 points (0.94%) to close at 22,348.749.

Yonhap News Agency

Han Ji-young, a researcher at Kiwoom Securities, commented, "There is a possibility of a consolidation phase as the market digests the concentration in AI stocks and concerns over the pace of index gains." She added, "Unless the prevailing narratives-such as the Federal Reserve’s rate cuts and the expansion of the AI investment cycle-are undermined, it is reasonable to expect that major stock markets in the United States, Korea, and other leading countries will not deviate from the current trend."

With the KOSPI surpassing the 3,400 mark for the first time ever the previous day, attention is focused on whether the leading sectors-semiconductors and financial stocks, which have driven the record highs-can maintain their strength. Kim Hyunji, a researcher at DS Investment & Securities, noted, "With the decision to maintain the 5 billion won threshold for major shareholder transfer taxes, the market has entered a phase of reduced policy risk." She added, "It is also worth watching whether the next focal point for the market-the reduction of the separate taxation rate on dividend income-will serve as a new momentum driver."

There is also speculation that China’s announcement of an anti-dumping investigation into U.S.-made analog chips, ahead of the U.S.-China Madrid talks scheduled for September 14-17 (local time), could provide a secondary benefit to domestic semiconductor stocks.

Han explained, "Today, the market is expected to start higher, influenced by AI momentum from Alphabet and optimism over improved U.S.-China relations." However, she cautioned, "It is necessary to incorporate into intraday strategies the possibility of a catch-up rally among lagging stocks, such as automobiles-which have plunged due to concerns over delays in tariff formalization-while some high-flying stocks in sectors like semiconductors and finance may face temporary price pressures."

The trend in foreign investor flows is also a key factor to watch. Foreign ownership of KOSPI stocks has reached 32.5%, the highest level since the start of the year, and cumulative net purchases by foreigners since May have amounted to approximately 13.8 trillion won. This raises the possibility that the market may have already absorbed much of the inflow.

Han added, "After 10 consecutive trading days of gains for the KOSPI, short-term fatigue and caution ahead of the FOMC could lead to a temporary pause in foreign buying patterns." She continued, "However, considering that foreigners have still recorded a cumulative net sale of 2.2 trillion won since the beginning of the year, a foreign-led supply-demand market is likely to persist for the time being."