KOSPI Plunges Over 14% in a Single Week; Multiple Brokerages Say Nearing Short-Term Bottom, but Rebound Still Hinges on AI Credit Risks
According to Yonhap News Agency, the KOSPI fell more than 14% last week, pulling back 37.8% from its peak over the past two years. The 12-month forward price-to-earnings ratio (PER) has dropped to 4.6 times, approaching levels observed during previous stabilization phases following short-term sharp declines. Yuanta Securities suggests that the bottom for both sentiment and capital flows lies near the 5,500 mark. Hana Securities forecasts a "W-shaped" trajectory for the index, projecting a secondary bottom around 5,300 points, with the level corresponding to a 1.0x price-to-book ratio (PBR) estimated at approximately 5,150. Hyundai Securities noted that attention should be focused on support at July's intraday low of 5,262 this week; if breached, the next key level will be 5,000. Regarding capital flows, foreign investors have maintained a streak of net selling in KOSPI for six consecutive months since May. According to Kiwoom Securities, they net sold more than 11 trillion KRW last week, primarily concentrated in the semiconductor sector. Kiwoom Securities projects the KOSPI will trade within a 5,200–5,900 range this week, noting that the strength of any rebound will hinge on earnings reports from U.S. tech giants such as Meta and shifts in the credit risk profile of AI-related firms. Investors will turn their attention to Meta's earnings release on the 21st (local time) to assess whether its AI investments can successfully translate into revenue and profitability. Multiple brokerage houses believe that stabilization in U.S. semiconductor equities, easing credit risks for AI firms, and a reversal of foreign capital flows into net buying are the key variables determining whether the KOSPI has truly bottomed out.
