Weak Open Triggered by U.S. AI Shocks… Intraday Reversal on Institutional Buying
Samsung Electronics and SK hynix Lead Rebound, Sustained Pension Fund Buying
Key Market Trends
① Sharp Open Lower on U.S. AI Headwinds… Concerns Mostly 'Assumptions'
The domestic stock market opened lower, weighed down by the sell-off in U.S. tech shares. Market sentiment was pressured by earnings from Amazon and Intel, alongside financing concerns surrounding Anthropic.
Amazon reported a trailing 12-month free cash flow deficit exceeding $42 billion, heightening skepticism over when heavy capital expenditures on artificial intelligence will be recouped.
Intel’s earnings guidance fell short of market consensus by approximately $1.5 billion, a shortfall largely attributed to an Israeli plant fire and supply chain bottlenecks.
Anthropic also faced ongoing financing concerns following speculation that it could be rated as speculative grade in the future. However, no credit ratings have been finalized.
Furthermore, Intel’s guidance was impacted by production disruptions rather than industry fundamentals alone. Given that it also underscored firm memory pricing, the market increasingly recognized that early-session headwinds had been overly exaggerated.
② Institutions Pivot… Strong Rebound for Samsung Electronics and SK hynix
Market tone shifted as pent-up buying interest flowed in following the morning session.
Wall Street analysts noted that recent pullbacks may be excessive, offering attractive entry points. 3Fourteen Research projected potential upward revisions to future earnings estimates, while Morgan Stanley similarly viewed short-term volatility as a buying opportunity.
Domestically, institutional investors spearheaded the rebound, net-buying across nearly all sectors. In particular, the National Pension Service extended its buying streak following the second-largest net purchase on record last Friday.
Samsung Electronics and SK hynix staged a robust rebound, accompanied by gains in semiconductor materials, components, and equipment (IP&E) stocks. Shipbuilding, pipe fittings, steel, and construction sectors also showed strength.
While foreign investors net-sold electrical/electronics, retail, and financial shares, they net-bought machinery, construction, transport/storage, and IT services. On the KOSDAQ market, institutional investors picked up machinery, electrical/electronics, and chemical stocks.
③ Oil Prices Plunge on Easing Iran Tensions… Sentiment Recovers
A partial easing of Middle East geopolitical tensions provided additional support to the equities market.
U.S. Secretary of State Marco Rubio expressed a preference for negotiations over military action, fostering a perception that a potential airstrike on Iran was not yet a certainty.
International crude prices tumbled by about 3%. Given market worries that surging oil prices could fuel inflation and interest rates—thereby raising financing costs for AI firms—the drop in oil prices served as a positive catalyst for tech sentiment.
Supply & Demand and Sector Trends
Institutional investors sat at the center of today’s rebound. Institutions recorded net purchases across most sectors, with the national pension fund maintaining strong buying pressure for a second consecutive session.
Led by Samsung Electronics and SK hynix, semiconductor shares rebounded sharply, helping the market quickly recoup its early losses. Another notable characteristic was the broadening of gains from semiconductor parts and equipment to shipbuilding, pipe fittings, steel, and construction.
Foreign investors net-sold electrical/electronics while selective buying emerged in sectors like machinery and construction. A point requiring further monitoring is that foreign capital has not yet pivoted to net-buying semiconductors despite the broader index rebound.
Market Strategist's Perspective
This week features a heavy calendar of market-moving events, including the U.S. midterm elections, earnings reports from key corporations such as AMD, and major employment data. With AI investment costs, interest rates, and crude oil prices all acting as active variables, market sentiment is facing an environment where a unified directional trend is difficult to establish.
Nevertheless, most of the headwinds recently highlighted have been recurring themes since last year. Concerns over AI capex and financing are not entirely new issues; rather, they are being reflected with heightened sensitivity amid the ongoing earnings season.
Today’s "weak-open, strong-close" pattern in the domestic market is meaningful in that pent-up buying actually materialized under these conditions. Notably, while foreign investors unloaded electrical/electronics shares, institutions and pension funds stepped up to drive the recovery of Samsung Electronics and SK hynix.
Pinpointing the exact market bottom remains difficult. As uncertainties gradually clear through the earnings season and the U.S. midterm elections, investors should leverage volatility to distinguish between existing market leaders, stocks with favorable earnings outlooks, issues accumulating institutional inflows, and direct beneficiaries of expanding AI investments.
Source: Market Strategist's Stock Story (t.me/shmstory)
YouTube: Market Strategist TV www.youtube.com/@blueoak1004
This article has been adapted from a Telegram post by "Market Strategist's Stock Story" with the author's consent. All content may contain errors and does not constitute a recommendation to buy or sell securities; thus, it cannot be used as a basis for actual trading. Under no circumstances may the contents of this post be used as legal grounds.
