[Good Morning Market] AI Stocks Surge in New York... KOSPI Expected to Open Higher

On the 9th, the KOSPI is expected to open higher, supported by a sharp rally in semiconductor and artificial intelligence (AI) related stocks in the New York stock market.

Last Friday in New York, the Dow Jones Industrial Average ended trading at 50,115.67, up 1,206.95 points (2.47%) from the previous session. This was the first time the Dow has broken above the 50,000 level. The S&P 500 Index closed at 6,932.30, up 133.90 points (1.97%), and the tech-heavy Nasdaq Composite finished at 23,031.21, up 490.63 points (2.18%) from the previous session.

The gains were driven by strength in semiconductor stocks, as the University of Michigan's consumer sentiment index for February beat expectations and expected inflation slowed, while AI investment momentum came back into focus. The University of Michigan's consumer sentiment index for February came in at 57.3, above the market consensus of 55.0, and expected inflation slowed to 3.5%, down from 4.0% in the previous month.

Nvidia surged 7.9%, leading the rise in the indices. Markets for Bitcoin and gold, where volatility had widened recently due to a series of forced liquidations, also appeared to be stabilizing. As semiconductor and AI names, which had been the leading stocks in the market, shifted into a sharp rebound, some observers say the market has at least passed a major hurdle.

However, macro variables remain a burden. The market still faces uncertainty over the next Federal Reserve (Fed) Chair. The resulting strength of the dollar and rising interest rates have been factors increasing the valuation discount rate for growth stocks, particularly AI stocks.

This week, the January employment report (on the 11th) and the Consumer Price Index (CPI, on the 13th) will be released in succession. Due to schedule changes caused by the temporary federal government shutdown, it is an unusual situation in which both indicators are released in the same week. The fact that these are the first major economic indicators to be released since the nomination of the next Fed Chair is also heightening market sensitivity.

In the domestic stock market, earnings announcements are scheduled for leading names in the defense, nuclear power, and securities sectors, including Hanwha Aerospace, Doosan Enerbility, and Mirae Asset Securities. As daily sector rotation among leading industries has frequently appeared since February, a differentiated performance among stocks within each sector is expected to continue through the earnings season.

Foreign investor flows are another variable. With the overhang from the sharp rise since the beginning of the year not yet fully resolved and volatility in U.S. AI stocks overlapping, foreign investors recorded net selling of 11 trillion won in the KOSPI last week. Of this, net selling in semiconductor stocks alone amounted to 9.9 trillion won.

Han Ji-young, a researcher at Kiwoom Securities, said, "Given that the Philadelphia Semiconductor Index jumped by more than 5% at the end of last week, we can expect foreign investors to turn to net buying and the index to rebound in the early part of the week." He added, "However, in the latter half of the week, caution over U.S. employment and CPI data, as well as a wait-and-see mood ahead of the long domestic holiday, could affect foreign investor trading." He went on to say, "The continuity of foreign investor trading and the direction of the domestic stock market will become clearer after the end of next week's holiday."