Kospi, Hit by ‘Blue Wave’ Shock, Looks for Rebound as NH Sees 5,000-6,000 This Week

NH Sees Kospi at 5,000-6,000 This Week

The Kospi, shaken by a U.S. “blue wave” shock — a Democratic surge — will be closely watched this week, from Nov. 9 to Nov. 13, for signs of a rebound. Brokerages say recent concerns over a pullback in artificial intelligence investment are overdone and that South Korean stocks may attempt a recovery.

NH Investment & Securities expects the Kospi to trade in a 5,000-6,000 range this week, according to the financial investment industry on Nov. 8. It cited easing worries over regulation of AI data centers and lower risks of a U.S.-Iran war, which could help stabilize interest rates, as upside factors. Foreign investor outflows were cited as a downside risk.

“The Democratic blue wave heightened concerns over tighter data-center regulation in the U.S., dragging down South Korean semiconductor shares sharply, but we believe AI data-center construction and memory demand will remain solid,” NH analyst Na Jeong-hwan said.

Democrats also support competition with China for AI leadership, limiting the incentive to block construction of data centers, the foundation of AI development, he added. The focus of regulation is on easing the cost burden on residents rather than banning construction. Some states are pursuing policies that raise fees for data centers while lowering some other charges.

Any easing in U.S.-Iran war risks is also worth watching. “If Democratic leaders step up calls for a swift end to the Iran war, those risks could ease from prior levels,” Na said. “If international oil prices fall and recently surging U.S. Treasury yields stabilize lower, concerns over AI companies’ fundraising and free-cash-flow deficits could also ease somewhat.”

CoreWeave’s third-quarter earnings report, due this week, could also mark a key turning point for whether sentiment toward AI investment recovers. If the U.S. neo-cloud company maintains its AI spending plans and shows sufficient fundraising capacity, that could revive sentiment toward semiconductor investment, Daishin Securities analyst Lee Kyung-min said. If debt burdens come back into focus or investment plans are lowered, however, pressure for a broader correction across the AI value chain could build.

The U.S. consumer price index and producer price index for October will also help determine whether macroeconomic pressures are easing. “If inflation comes in above forecasts, that could increase the odds of additional rate hikes by the Federal Reserve and weigh on stocks,” Lee said. Slowing inflation, if confirmed, could support rate stability and a rebound led by beaten-down growth shares.

Still, foreign investor outflows tied to Anthropic’s planned initial public offering remain a concern. Anthropic, the company behind the AI model Claude, is aiming to list on Nasdaq before Thanksgiving on Nov. 26. The offering is expected to be around $100 billion, topping SpaceX’s $75 billion deal in June and marking the largest IPO on record.

“That could weigh on flows into South Korean semiconductor shares during the global reallocation of funds,” Na said. But when SpaceX listed, foreign investors switched to net buying on the day of the debut, suggesting supply-and-demand pressure may ease once the offering schedule is completed.

Lee Su, Hankyung.com reporter 2su@hankyung.com