[Good Morning Market] "Korean Stocks Expected to Recover on AI, Semiconductors, and Dividend Demand"

As the end of the year approaches, the Korean stock market is expected to maintain its recovery momentum, buoyed by factors such as artificial intelligence (AI), semiconductors, demand for dividends, and policies aimed at revitalizing the KOSDAQ market.

Han Ji-young, a researcher at Kiwoom Securities, stated on the 22nd, "Unlike the second and third weeks of December, there are no major events scheduled for this week, which should reduce market fatigue and the level of difficulty in responding compared to one or two weeks ago." She added, "Individual factors such as AI, semiconductors, dividend demand, and KOSDAQ revitalization policies remain in play. As sector rotation continues, these factors are likely to support the market's recovery, and this premise should be reflected in weekly response strategies."

On the 19th, the KOSPI index and others are displayed on the status board of Hana Bank dealing room in Jung-gu, Seoul. Photo by Yonhap News

Recently, the stock market experienced significant volatility over two consecutive weeks due to a series of major events. Poor earnings from Oracle in the United States and uncertainties surrounding Broadcom led to sharp declines, particularly among leading AI stocks. Even after the Federal Open Market Committee (FOMC) cut interest rates, the market remained volatile due to ongoing uncertainty about the direction of next year's benchmark rate.

Han noted, "After Micron's 'super surprise' earnings late last week and the November Consumer Price Index (CPI) that did not further fuel inflation concerns, the previously negative sentiment in the market has started to shift." She explained, "On Friday, not only did major AI stocks rebound in the U.S. market, but the entire AI value chain saw a simultaneous recovery, which is in line with this change in sentiment."

On the 19th (local time), all three major U.S. stock indices closed higher. News that the Donald Trump administration had begun considering allowing Nvidia's H200 chips to be exported to China helped lift the entire tech sector. As a result, Nvidia rose by 3.93%, Broadcom by 3.18%, AMD by 6.15%, and Micron Technology surged by 6.99%.

Additionally, news that ByteDance, the Chinese parent company of TikTok, had signed a contract to establish a U.S. joint venture with Oracle and others acted as another positive catalyst, fueling expectations for a 'Santa rally' on the New York Stock Exchange.

Han also highlighted the news of SpaceX's plans for an initial public offering (IPO). She commented, "The SpaceX IPO issue is drawing new inflows into space-related theme stocks in both the Korean and U.S. markets, which demonstrates a recovery in risk appetite." She further noted, "It is also worth noting that, following the price adjustment since December, the entry burden that had frequently been raised in the stock market is now easing."

She also pointed out that, domestically, demand for dividend investment could increase ahead of the dividend record date on the 26th. She believes that high-dividend and dividend growth stocks in sectors such as banking, holding companies, securities, and automobiles may outperform other stocks during the week.

Han predicted, "Although the KOSDAQ revitalization policy has been in the market since the end of November, its official release after the close last Friday means that, in the early part of this week, the key point to watch will be whether large-cap stocks within the KOSDAQ (such as those in bio and secondary battery sectors) show momentum in price gains and improved inflows."