Stock Market Falls Late in Session Due to Houthi Rebel Risk

The KOSPI index began to fall around 1:30 PM on September 8, and the decline accelerated around 2:00 PM as news of geopolitical risks related to Houthi rebels, including attacks on Saudi energy facilities and civilian casualties, spread. Researcher Hong Sun-ae explained the market's anxiety, stating, "News of geopolitical risk has resurfaced and is having an impact."

Despite purchases by foreigners and institutions, the large volume of individual selling put pressure on the index, leading to continued overall instability in supply and demand. Researcher Hong Sun-ae noted, "Today, following yesterday, individual investors are selling trillions of won in the KOSPI," indicating continued individual investor outflow.

Expert Lee Kwon-hee analyzed, "How did foreigners' trend look today? When such a problem emerged, if you look at how they responded with spot assets, they actually bought more. They bought steadily after 2:00 PM." This suggests that foreigners may have considered the market's reaction to short-term negative factors an overreaction and engaged in buying the dip. In contrast, individual investors sold an additional 700 billion won after 2:00 PM, totaling 3.2 trillion won in net selling.

Expert Kim Jang-yeol stated, "News even came out that Apple is trying to sign a 3-5 year long-term contract with Kioxia without a price cap on NAND. Apple gave up, because they couldn't get it." He emphasized the fierce competition among companies to secure semiconductor supply, which can be interpreted as a sign of improving fundamentals in the semiconductor industry.

Expert Lee Kwon-hee stated, "The volume seems to be absorbed faster than thought. Currently, it's almost 13 trillion, nearly 14 trillion. So, the volume that was net purchased, just under 30 trillion," suggesting that market stabilization could be accelerated depending on changes in individual investor sentiment.

Researcher Hong Sun-ae analyzed, "The KOSPI finished at around 2,695 points, falling 0.58%... Since the KOSPI had risen to about 2% today, the volatility up and down was still over 3%." Among major stocks, Samsung Electronics showed a slight decline, but SK Hynix rose 0.5%, showing a differentiated trend within the semiconductor sector.

Jusung Engineering saw foreign buying for three consecutive trading days, and Hanmi Semiconductor also experienced four consecutive days of net buying by both foreigners and institutions. Expert Lee Kwon-hee explained, "Jusung Engineering's recent supply and demand, led by foreigners, has been very strong for three consecutive trading days... In the case of Hanmi Semiconductor, too... foreigners and institutions have been net buying together for four consecutive days."

Nuclear power related stocks showed strength as KEPCO E&C's technical advantages were highlighted amidst Westinghouse's patent issues. Expert Lee Kwon-hee explained, "The current trend shows KEPCO E&C as the strongest... KEPCO E&C has the technical design for APR 1400. However, if APR 1000 is used, KEPCO E&C becomes irrelevant..." He analyzed that KEPCO E&C could benefit from APR1000 reactor design. The possibility of acquiring a stake in Westinghouse was also discussed, drawing market attention.

Geopolitical issues were identified as the main reason for the sudden shift to a downturn in the market, which had been on an upward trend until 1 PM today. Expert Kim Jang-yeol stated, "If that news hadn't come out, would it have fallen like this? ... Of course, there's nothing else but that news. ... No news came out from the US... It was around 2 PM when the trigger was set." He analyzed that the news related to Houthi rebels was the decisive turning point for the market's direction, showing the market's sensitivity to external variables.

Expert Kim Jang-yeol explained, "If the won strengthens by about 10% in the exchange rate, then it falls by 12%. There's an earnings forecast for next year, let's say 100. So, because analysts probably set it at over 150, you have to subtract about 10% from the operating profit there as well." It's time to review the exchange rate criteria reflected in companies' earnings forecasts and consider potential fluctuations in operating profit.

When oil prices are between $80 and $110, they can be seen as moving within the market's fluctuation range.

Expert Lee Kwon-hee stated, "To enlighten, the recent topic of the three common mistakes retail investors make almost all falls within that category." He emphasized that trading habits that fail to capitalize on leading stock trends often occur. He also cautioned that even professional investors can make such mistakes.

He also advised distinguishing between optical communication and optical transceivers when approaching them.

Ongoing competition with low-cost Chinese products was also cited as a factor making Daehan Optic Network's earnings improvement difficult.

Expert Kim Jang-yeol explained, "Hynix's PBR was 5.5x at today's closing price. I said this 5.5x is appropriate because it's a 20% discount compared to Micron." This suggests that Hynix's stock price is currently evaluated at a fair level, and if the main stock rises, the discount rate could narrow, providing additional upward momentum.

SpaceX-related stocks showed strength as issues such as increased launches by SpaceX and US government support for the aerospace industry emerged. Expert Lee Kwon-hee said, "SpaceX-related stocks moved today. In the early part of the session, defense and aerospace stocks also rose. I'm watching HVM, and it rose about 7% today." He mentioned the rise of HVM and SeAH Besteel Holdings, among others. However, he also suggested that a cautious review of HVM's valuation is needed, as it is estimated at around 25x, to assess its additional investment appeal.