U.S. stocks related to artificial intelligence (AI) and semiconductors rebounded, leading to expectations that the domestic market will open higher on November 4. After a sharp decline due to foreign selling the previous day, the KOSPI is anticipated to attempt a rebound, particularly among large-cap semiconductor stocks. The results of the U.S. midterm elections and foreign capital flows are seen as key factors that will determine market direction during trading.
On November 3, the Dow Jones Industrial Average closed down 197.26 points (0.38%) at 51,786.72. In contrast, the S&P 500 rose by 27.52 points (0.36%) to finish at 7,568.92, while the Nasdaq Composite gained 207.65 points (0.83%) to close at 25,372.01.
After concerns about the burden of AI infrastructure investments, technology stocks saw a wave of bargain buying. Notable gains were seen in Nvidia (up 2.29%), Micron Technology (up 2.58%), AMD (up 3.65%), and Broadcom (up 3.07%). SK Hynix's American Depositary Receipts (ADRs) also rose by 2.09%.
The Philadelphia Semiconductor Index increased by 2.63%, and the MSCI Korea ETF rose by 2.27%. KOSPI night futures also climbed by 1.70%, boosting expectations for a rebound in the domestic market.
In pre-market trading on NXT, major large-cap stocks showed strength. As of 8:05 a.m., Samsung Electronics was trading at 226,500 won, up 3.19% from the previous day. SK Hynix also recorded a 4.08% increase, reaching 1,455,000 won.
Other stocks such as Samsung Electro-Mechanics (up 4.43%), SK Square (up 4.45%), LG Energy Solution (up 2.51%), and Hyundai Motor (up 1.44%) also showed upward trends. However, Samsung Biologics was down by 0.96%.
Seo Sang-young, a researcher at Mirae Asset Securities, predicted that the strength of U.S. semiconductor companies and falling international oil prices would support a higher opening for the domestic market. He noted that Apple’s mention of rising memory prices adds to expectations for improved profitability for Samsung Electronics and SK Hynix.
Positive earnings reports from U.S. companies were also highlighted as a favorable factor. Seo pointed out that AMD, Supermicro, and Arista Networks have reported results and guidance that exceeded market expectations, showing strength in after-hours trading. The solid order growth from Eaton, a data center-related company, is expected to positively impact domestic power equipment stocks.
However, analysts caution about potential volatility stemming from the U.S. midterm election results. Starting from the morning, results from key competitive districts are expected to be announced, with outlines of changes in the House and Senate seats anticipated in the afternoon. Depending on the election outcomes, U.S. stock index futures, Treasury yields, and the dollar may fluctuate, potentially increasing volatility in the domestic market.
The decline in international oil prices is also seen as a positive factor for the domestic market. Oil prices have turned downward amid expectations of progress in negotiations between the U.S. and Iran. However, stronger-than-expected U.S. job openings and concerns about prolonged tightening by the Federal Reserve have led to rising Treasury yields, which are viewed as a burden.
Seo forecasts that the domestic market will start to rebound centered on semiconductors, but the direction during trading will depend on the midterm election results. He particularly noted that after 10 a.m., foreign futures and program flows, U.S. Treasury yields, and movements in Nasdaq 100 futures will determine whether the gains can be maintained.
* This article has been translated by AI.
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