Foreign Investors Bet 3 Trillion Won as KOSPI Enters Second Bull Run… Hyundai Motor and LG Electronics in Focus as AI Leaders

This positive move in US stocks lifted expectations for Korean stocks, which opened with a gap up early in the session.

KOSPI dropped significantly, and KOSDAQ declined even more clearly, reflecting broad market weakness.

Several factors are believed to have combined to drive the decline. A war rumor spread on Telegram that sanctions on Iran would come next week, but this was already news from early that morning. Profit-taking ahead of the weekend and holiday was also raised as a likely factor. These factors are cited as explanations for the sharp fall, and each appears to have some validity.

Recently, reports about US-China tariff transshipment have surfaced, with China reportedly routing exports through other countries to avoid high tariffs and reach the US. The US imposes average tariffs of over 50% on Chinese goods, and Chinese companies are increasingly bypassing 'Made in China' labels by routing through third countries to evade duties. The US estimates the tariff evasion from such transshipment exceeds $4 trillion and has compiled a Tier 1, 2, and 3 list of countries at high risk of transshipment. Korea was reportedly included on the Tier 1 list, raising concern.

Korea is a representative non-Chinese country that can replace China and maintains friendly relations with the US. It is therefore doubtful the US would treat Korea as a Chinese transshipment country and impose high tariffs, and such a possibility is expected to be low.

Since July, China-related sanctions have been announced weekly, and recently there were sanctions on robots (household walking robots and humanoid robots) and solar tariffs. It can reasonably be inferred that this series of measures is being used as a strategic card for the US to gain the upper hand in negotiations with China. This is interpreted as part of the US's long-standing hardline stance toward China.

This suggests that the overall market trend may remain positive despite the short-term decline.

Overall, it was a day in which chips, robots, and physical AI-related stocks were strong.

Therefore, the ongoing threats, pressure, and offers toward Iran may be less a real intention and more an expression of frustration at things not going his way.

With oil and bond yields showing stability or even declines without notable moves, he assessed that the market is not reacting sensitively to war risk.

So far, foreign investors have recorded four consecutive days of net buying and are emerging as a key market participant.

The Wall Street Journal said KOSPI has entered a new bull market, and Bloomberg described it as 'the bulls are back,' emphasizing the recovery in Korean stocks.

Bloomberg said Microsoft's and Amazon's earnings releases last month first eased AI bubble concerns, and as a result the market has returned to 'full greed mode.'

Its position is that fundamentals remain the same and nothing has changed. However, it said supply-demand distortions caused the sharp decline, and it assesses that the market is now in the process of normalizing as those distortions are largely resolved.

That they net bought more than 3 trillion won even after today's options expiry, with a three-day holiday ahead, is considered highly meaningful. This suggests foreign investors are expanding their positions based on strong confidence in the domestic market.

This shows that not only foreign investors but also institutional investors hold a positive outlook on the upside potential of the domestic market. Stabilization of this supply and demand could provide additional upward momentum for the market.

This can be interpreted as a strongly positive signal that KOSPI may begin to move out of its downtrend and into a trend reversal.

The 7,500 level may act as strong resistance, and breaking through it will likely require additional buying.