Recent trends in the U.S. stock market have made it increasingly difficult to gauge the direction of the domestic market. Despite a rise in the NASDAQ, the KOSPI has experienced more down days than up days. Notably, the correlation between the rise of U.S. semiconductor stocks and the KOSPI's performance has dropped to half of what it was in September. This divergence continued on the first trading day of November.
On November 2, the Korea Exchange reported that the KOSPI closed at 5,859.08, up 128.34 points (2.24%) from the previous trading day. This came despite the NASDAQ Composite Index falling 2.86% to 25,437.00 and the Philadelphia Semiconductor Index (SOX) plummeting 7.20% to 10,688.80 on October 30.
A comparison of the closing fluctuations between the NASDAQ and the KOSPI revealed that in October, the KOSPI rose only 5 times out of 11 instances (45.5%) following a NASDAQ increase. Conversely, it fell 6 times (54.5%) despite the NASDAQ's gains.
In September, the KOSPI rose 6 times out of 8 instances following a NASDAQ increase, resulting in a 75.0% correlation. This dropped by 29.5 percentage points to 45.5% in October, with the KOSPI's average fluctuation rate shifting from a gain of 0.16% in September to a loss of 0.08% in October.
The disconnect with U.S. semiconductor stocks has become even more pronounced. In September, the KOSPI rose 10 times out of 15 instances (66.7%) following a SOX increase, but in October, it only rose 3 times out of 9 instances (33.3%). The number of days the KOSPI fell despite a SOX increase rose from 5 times in September to 6 times in October.
On October 19, the NASDAQ closed up 1.11% at 26,430.89, and the SOX rose 1.61% to 11,316.34. However, the following day, the KOSPI dropped 215.27 points (3.73%) to close at 5,552.74. Similarly, on October 21, despite the NASDAQ and SOX rising by 1.05% and 1.97%, respectively, the KOSPI fell 201.89 points (3.52%) to 5,533.77 on October 22.
After declines in the U.S. market, the KOSPI's response has shown little variation. Following a NASDAQ drop, the KOSPI fell 7 times out of 11 instances (63.6%) in September and 6 times out of 9 instances (66.7%) in October. However, the average decline for the KOSPI in October was greater at 1.74%, compared to the NASDAQ's average drop of 1.00%.
In contrast, instances of the KOSPI rising after a SOX decline have increased. In September, the KOSPI fell every time after a SOX drop, but in October, it rose 5 times out of 11 instances. A notable example occurred on October 22, when the SOX fell 6.72% to close at 10,731.98, yet the KOSPI rose 0.30% to close at 5,550.30 the following day.
Overall, the instances where the KOSPI moved in the opposite direction of the SOX increased significantly, from 5 out of 19 instances (26.3%) in September to 11 out of 20 instances (55.0%) in October. This indicates a weakening correlation between U.S. market gains and domestic market performance, making it increasingly challenging to predict the KOSPI's direction based solely on U.S. market trends.
* This article has been translated by AI.
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