Amid concerns about an artificial intelligence (AI) overheating narrative, the KOSPI, which had plunged early in the session, trimmed losses and reclaimed the 3,900 level. Foreign investors are net sellers in large volumes, but the index is attempting a rebound on the back of retail buying.
As of 2 p.m. on the 19th, the KOSPI is moving around the 3,920 level, down 0.6% from the previous trading day. The index opened slightly higher but turned sharply lower early in the session, falling to the 3,860 level.
However, as retail money flowed in, the index's losses began to narrow. Just before lunch, it briefly turned higher. After repeatedly fluctuating around the 3,950 level, the index turned lower again in the afternoon, but the decline is not steep.
Institutions, which had stayed on the sidelines early on, also turned net buyers, with most of the net purchases attributed to financial investment. The inflows are presumed to be moving into exchange-traded funds (ETF). Retail investment funds appear to be supporting the index's downside.
The reason foreign funds have been steadily leaving appears to be concerns over the AI bubble narrative that has rattled the U.S. stock market. On the night of the 18th, Sundar Pichai, Alphabet chief executive officer (CEO), acknowledged, "There are irrational elements similar to the dot-com bubble," and noted, "If a bubble bursts, no company will be immune." Some investment banks (IB) also downgraded their investment views on Microsoft and Amazon.
As worries grow that AI investment may be overheated, U.S. stocks fell, and foreign outflows from the domestic market are continuing. On the day, foreigners are net selling about 1 trillion won just in the Korea Exchange's main board.
Large-cap stocks by market capitalization are falling across the board. In particular, Samsung Electronics and SK hynix are each down 1.5%. However, in the case of SK hynix, retail inflows have reduced the loss.
The KOSDAQ is showing a similar pattern to the KOSPI. After starting with a modest gain, the index turned sharply lower early on to the 850 level, but as losses narrowed, it briefly rebounded. It turned lower again in the afternoon, but the index recovered the 870 level.