[Edaily Reporter Kwon Oh Seok ] This week (October 19–23), attention is focused on whether the domestic stock market will see a technical rebound following a record plunge. Another key point is whether earnings reports from global Big Tech companies will have a positive impact. Amid a sharp short-term plunge in the KOSPI caused by heavy selling by foreign investors and doubts about the profitability of AI (artificial intelligence) investments, the market is seeking a turnaround driven by stabilizing supply and demand and earnings momentum.

Last week, the KOSPI plummeted—triggering a circuit breaker—as a supply-demand gap compounded the massive selling by foreign investors, marking its seventh consecutive trading day of declines. Foreign investors recorded net sales of over 11 trillion won in the KOSPI market over the week, putting intense pressure on the index. However, on the 16th, the last trading day of the week, the market rebounded for the first time in eight trading days, closing at 5,668.05—up 113.83 points (2.05%) from the previous trading day.
Securities analysts cite supply-demand imbalances and doubts about the sustainability of AI investments as the key causes of this sharp decline. Since the beginning of the year, the majority of foreign net selling has been concentrated on large-cap semiconductor stocks such as SamsungElectronics(005930)and SK hynix(000660). Meanwhile, the buffer effect provided by SamsungElectronics’ share buyback program—which had been supporting the index’s bottom—dwindled sharply after the program ended in early October. Compounding this, a series of external headwinds—including credit risks at AI-related companies like CoreWeave and concerns over China’s Changxin Memory Technology (CXMT) catching up technologically—cooled investor sentiment.
Lee Jae-won, an analyst at Yuanta Securities Korea, assessed the situation, stating, “We view this sharp decline as one driven primarily by the absence of buyers rather than a deterioration in fundamentals.” He added, “With a lack of buyers to fill the gap left by the end of the share buyback program, foreign selling has created a vicious cycle that amplifies the decline in stock prices.”
Conversely, as the market has entered an extremely oversold zone, expectations for a short-term technical rebound are rising. As of the 14th, the KOSPI’s Relative Strength Index (RSI) fell to 23.2, entering technical oversold territory. According to an analysis by Yuanta Securities Korea, out of the 27 instances since 2006 when the KOSPI’s RSI entered oversold territory, the probability of a stock price rise one week later reached 63%. In particular, among the 12 cases where the index had plummeted by more than 10% over the previous seven trading days, the probability of a rise one week later was 83%.
In addition, valuation attractiveness has reached its peak. For example, SamsungElectronics’ 12-month forward P/E (price-to-earnings ratio) has fallen to around 3x, and its 24-month forward P/B (price-to-book ratio) has also reached 0.94x, matching the lows seen during past downturns.
Lee Kyung-min, an analyst at DaishinSecurities, stated, “Even when compared to past crises, the potential for further declines is likely limited,” adding, “The current index is down 40.4% from its June 19 high of
9,385, and is approaching the median decline rate of 43.7% seen during seven past crisis periods: △Black Monday, △the Asian Financial Crisis △ the dot-com bubble △ the global financial crisis △ the European debt crisis △ the COVID-19 pandemic △ and the 2022 monetary tightening—a total of seven crisis periods,” adding, “Accordingly, we expect further declines below 5,300 to be limited.”
Experts emphasize that for supply-and-demand volatility to subside, the earnings and guidance of global AI big tech companies must first be confirmed.
This week, major Big Tech companies—including Meta, Tesla, IBM, and Lam Research—will release their earnings reports one after another, starting on the 21st. Whether these earnings reports can dispel doubts about the sustainability of AI capital expenditures (CapEx) and profitability is expected to determine the success or failure of a market rebound. A key domestic event is the Bank of Korea’s Monetary Policy Committee meeting scheduled for the 22nd.
Lee Sang-jun, an analyst at NH INVESTMENT & SECURITIES, said, “The high-interest-rate environment is fueling concerns about funding for AI infrastructure companies, and doubts about the sustainability of AI investments are growing,” but added, “Considering the increase in South Korean exports from October 1 to 10 and TSMC’s strong third-quarter earnings, the fundamentals remain positive.”