[Edaily Reporter Kwon Oh Seok ] On the 6th, as the KOSPI plummeted and broke below the 5,000 mark, SANGSANGINVESTMENT&SECURITIES stated, “It is important to keep in mind that investment opportunities ultimately lie within fear.”

Kang Hye-seong, an analyst at SANGSANGINVESTMENT&SECURITIES, said, “Since investor sentiment is very weak in the short term, the volatile trend could continue through next week,” but added, “Historically, there have been many instances where the Philadelphia Semiconductor Index surged sharply after a steep decline. In the case of the KOSPI, while returns were poor for the next five days, there were many instances where the market recovered over the following 15 days.”
Earlier, as the “Blue Wave”—in which the Democratic Party won both the U.S. Senate and House of Representatives in the midterm elections—became a reality, fears swept through the stock market that Washington’s policy direction would shift toward “stricter regulation of artificial intelligence (AI).” As a result, the U.S. Nasdaq index plunged more than 5% overnight, and the Philadelphia Semiconductor Index also tumbled by more than 12%. The KOSPI, unable to withstand the shock of the U.S. “blue wave,” fell below the 5,000 mark.
This marks the first time the KOSPI has fallen below 5,000 in nine months—since last February—and the explosive selling pressure triggered the 11th circuit breaker of the year. The KOSPI dropped as low as 4,911.28 during the session but quickly recovered its losses and has since regained the 5,000 mark.
Researcher Kang explained, “The concerns about the AI ecosystem that have surfaced since October were actually issues raised as early as the beginning of the year. The reason the ecosystem has been sustained by hyperscalers’ massive investments and the funding secured for them is that they had sufficient investment capacity and were generating substantial profits.”
He added, “However, the deficit in free cash flow (FCF) widened further in the third-quarter earnings reports, and the confirmation of a vicious cycle—where AI advancements negatively impact revenue from core businesses (advertising and search engines), as seen in Google’s case—has significantly undermined the fundamental investment rationale.”
In his view, unlike in the past when the Korean stock market tended to lag behind the U.S. market, it has increasingly been influencing global markets proactively. He emphasized, “The fact that the KOSPI has fallen below a price-to-book ratio (PBR) of 1 and broken through the 5,000 mark—a symbolic indicator—is a factor that increases the likelihood of a rebound,” adding, “At this point, a 12-month forward PBR of 1.0 translates to approximately 5,100. Ultimately, we need to watch how this attractiveness from a valuation perspective translates into a rebound and influences global investor sentiment.”