U.S. Stocks Hit Record Highs, But KOSPI Trapped in Trading Range for Three Months: Why?

[Anchor]

Backed by the strength of artificial intelligence-related stocks, the U.S. stock market has recently been breaking all-time highs. On the other hand, South Korea's KOSPI has been stuck around the 7,000 level for months, despite record-breaking performances by semiconductor companies.

Reporter Lee Tae-gwon analyzes the reasons why.

[Reporter]

Wall Street indices such as the Nasdaq and S&P 500 have continued their upward trajectory this week by setting record highs.

In contrast, South Korea's KOSPI closed at 6,625 yesterday, hovering around the 7,000 threshold for the third consecutive month.

AI remains at the center of the market, so why is it failing to gain traction in South Korea unlike the U.S.?

First of all, there is a lack of liquidity in the local market right now.

The average monthly trading value of the KOSPI, which reached nearly 50 trillion won in May, was halved to 21 trillion won last month.

Retail investors have lost both their capital and willingness to invest due to the shock of the July crash, while foreign investors have net-sold 197 trillion won this year.

There is no driving force left to pull the index upward.

At a deeper level lies anxiety regarding semiconductors, which drive the domestic market.

In the U.S., the results of massive AI investments made so far by major U.S. tech giants—such as Nvidia, Amazon, and Meta, known as the Magnificent Seven—are starting to show in their earnings.

South Korea makes money by selling memory chips to these companies, but doubts linger over how long Samsung Electronics and SK hynix can sustain their high profit margins.

In particular, questions have been raised that as production increases due to factory expansions starting in 2028, the supply shortage will ease, making it difficult for memory prices to surge as steeply as they do now.

In fact, unlike the beginning of the year when they rose sharply, the monthly price growth rates of general-purpose PC DRAM and NAND have dropped to the single digits.

The market is paying close attention to whether Samsung Electronics and SK hynix will mention their memory demand outlook during their earnings conference calls scheduled for later this month.

[Interview / Kim Jae-seung, Analyst at Hyundai Motor Securities: "Despite growth in Q (memory sales volume), if it is confirmed that P (price) does not drop—well, once that is verified, people will naturally be able to buy memory chips again without worry."]

Additionally, U.S. AI firm Anthropic is scheduled to go public in November. While some forecast this will serve as a gauge of market interest in the sustainability of AI, others expect it to have a negative impact on the domestic market due to capital concentration elsewhere.

(Photo: Choi Ho-jun | Video Editing: Kim Jong-mi, Design: Lee So-jung)
※ Please note: This article was translated by AI and may contain errors.