Goldman Sachs Equity Strategist: South Korean Stock Market to Rebound After "Terrible" Correction

Goldman Sachs Asia Pacific Chief Equity Strategist Timothy Moe said that after a circuit-breaker-triggering decline, the South Korean stock market is expected to rebound. In the long term, this will prove to be a technical correction, although a scary one in the midst of a prolonged bull market. Fundamentals remain very strong.

The Korea Composite Stock Price Index once plummeted 8.8% on Monday, leading declines among Asian tech stocks. This drop occurred after a strong rally fueled by AI optimism, during which many investors used leverage to chase gains in select semiconductor and tech stock sectors.

Timothy Moe said: "There were clear signs of increased speculative activity, particularly among South Korean retail investors who were especially keen on buying certain leveraged ETFs. What we are currently seeing is that these accumulated positions are being forcefully sold, and leverage effects are further exacerbating the decline." Goldman Sachs raised its outlook for the South Korean and Taiwanese stock markets last week, citing expectations that the AI boom will drive profit growth in these tech-heavy markets. Moe stated on Monday that South Korean stocks are very reasonably valued and expects that underlying profits will continue to drive growth. (Jinshi Data)