Is a Rate Hike Itself Not a Bad Thing? ... If Only 'Additional Hikes' Are Closed, KOSPI's Distrust Will Fade | Hong Sun-ae, Lee Kyung-min, Daishin Securities FICC Research Manager

Summary

Lee Kyung-min of Daishin Securities argues that the AI investment slowdown scare is overdone and that the Fed/BOJ rate-hike cycle may be near its peak. He sees strong AI semiconductor fundamentals, limited KOSPI downside around 6,200-6,300, and potential upside to 7,200 or higher if bond yields stabilize. He also highlights USD/KRW and DXY topping signals and favors beaten-down Korean growth sectors such as biotech/pharma and internet.

• AI development-speed-control concerns are viewed as noise because no major player can afford to slow investment.
• Nvidia, TSMC, and Korean semiconductor export data remain strong, supporting the AI semiconductor supply chain.
• The speaker leans toward a Fed hold, but says a hike with a dovish dot plot could still be risk-positive.
• KOSPI downside is seen as limited near 6,200-6,300, with upside to 7,200 and possibly above the previous high if rates stabilize.
• USD/KRW and the dollar index show bearish MACD divergences, suggesting their upward momentum is weakening.
• Beaten-down Korean growth stocks in biotech/pharma and internet are highlighted as a contrarian rebound trade if yields stabilize.
• Foreign inflows and financial investment buying are expected to return as bond yields stabilize.