The Korea Composite Stock Price Index (KOSPI) fell nearly 2% on December 15th, influenced by a combination of controversies surrounding an artificial intelligence industry bubble and apprehension surrounding the upcoming release of core US economic indicators. It opened more than 2.7% lower at one point during the day, then attempted a rebound but ultimately failed to fully recover its losses, closing weakly.
On the same day, the KOSPI index closed at 4,090.59 points on the Korea Exchange, down 76.57 points from the previous trading day. In the morning session, influenced by volatility in the US stock market and a plunge in technology stocks, it once fell to 4,053.74 points, a drop of 113.42 points; later in the session, some investors bought on dips, narrowing the decline. However, near the close, downward pressure intensified again, failing to hold the 4,100-point mark.
One of the main factors suppressing investor sentiment is the recent emergence of concerns about a valuation bubble in the artificial intelligence industry. AI-related stocks have also plummeted on the Nasdaq market, which is dominated by US tech stocks, impacting the South Korean domestic market. In particular, the gap between earnings expectations and actual growth in the AI sector is exacerbating market uncertainty.
Meanwhile, the US will release a series of major economic indicators this week. In particular, the Consumer Price Index (CPI) and the results of the Federal Open Market Committee (FOMC) meeting are about to be announced, and the market is closely watching for signals regarding the timing of the Federal Reserve's interest rate cuts and the economic outlook. In the lead-up to such significant events, investors typically tend to avoid uncertainty, putting pressure on both domestic and international stock markets.
On the other hand, the South Korean KOSDAQ index fluctuated relatively little, closing at 938.83 points, up 1.49 points from the previous trading day. On the same day, the Korean won opened at 1,476.0 won against the US dollar, up 2.3 won from the previous day, and subsequently, overall volatility in the foreign exchange market increased.
This trend is likely to continue for some time, depending on the results of US economic indicators. In particular, if earnings reports from the AI industry or signs of a slowdown in consumption become clear, downward pressure on technology stocks could intensify again. South Korean domestic investors are also expected to react sensitively, making high market volatility unavoidable before the end of the year.
