[Anchor]
Yesterday's historic stock market surge was driven by news from the U.S. Major U.S. semiconductor demand companies posted strong earnings, while expectations grew that the vicious cycle of selling fueled by hedge funds would ease.
Min Gyeongho has more details.
[Reporter]
The turning point came primarily from positive outlooks on semiconductor demand.
Microsoft and Amazon successively reported cloud business revenues that exceeded expectations, alleviating doubts about semiconductor demand.
News that a fund managed by Leopold Aschenbrenner, a former OpenAI researcher dubbed a genius investor, was sold to another hedge fund provided a warm breeze for supply and demand.
The fund had taken an aggressive approach using 4x leverage primarily on U.S.-listed semiconductor stocks like SK Hynix. However, this month's plunge in semiconductor prices triggered massive capital losses.
As the capital base shrank, the relative debt size grew, forcing the fund to sell its holdings to adjust leverage ratios. This selling volume created a vicious cycle that sparked further declines.
Amid this situation, news of the fund's acquisition led to interpretations that large-scale selling pressure could subside, prompting U.S. semiconductor stocks to skyrocket overnight.
[Han Ji-young / Analyst, Investment Strategy Team, Kiwoom Securities: Pressures such as forced liquidation and margin calls will ease, and this will likely signal the end of the deleveraging that has been dragging stock prices downward....]
Korean semiconductor stocks, which had been excessively undervalued compared to U.S. semiconductor shares like Micron, bounced back much more strongly like a spring.
[Shin Seung-jin / Head of Investment Information Team, Samsung Securities: Even with today's rise, the KOSPI valuation remains in a remarkably undervalued zone compared to the global stock market. I believe the possibility of an additional rebound is high right now.]
However, voices advise guarding against excessive optimism, as major price-volatility catalysts remain ahead, including earnings announcements from U.S. semiconductor giants like AMD and Nvidia, as well as DRAM demand surveys for next year.
Experts also warn that the market conditions over the past month demonstrated how investing with excessive debt can lead to unexpected, severe losses.
(Photo courtesy of: Kim Hyun-sang | Video edited by: Kim Jong-tae)
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