Foreign Investors Pile into AI Shares as Domestic Stocks Plunge 2%

South Korea's stock market fell more than 2% on the 2nd. Foreign investors primarily bought shares of artificial intelligence (AI) related companies and telecommunications equipment stocks. The domestic market plunged over 2% following a speech by U.S. President Donald Trump, amid concerns of a prolonged war. As of 10:48 AM, the KOSPI index was down 118.51 points (2.16%) to 5,360.19, and the KOSDAQ index had fallen 23.42 points (2.10%) to 1,092.76. Foreign investors net-bought focusing on aerospace and fiber optic themes. They purchased stocks such as Hurim Hitech, Daehan Fiber Optics, LG Display, Aptochromes, and Korea Advanced Materials. Daehan Fiber Optics' stock price rose following Nvidia CEO Jensen Huang's remarks on the importance of optical semiconductors. Institutional investors net-bought focusing on shipbuilding and IT component stocks, with Samsung Heavy Industries, Samsung SDI, SK Hynix, and Hyundai Movex among the top institutional net buys. 'Top 1%' investors chose to buy ABL Bio shares and reduce holdings in Rainbow Robotics. The government and financial authorities have reignited discussions on the need to change the name of the moneylending business, with voices emerging to improve the negative image associated with the term 'moneylending' and update terminology to reflect changes in the financial market environment.

The Presidential Office has reportedly been paying attention to related discussions. Samsung SDI's North American market strategy has emerged as a variable in the K-battery industry. Samsung SDI aims to secure a breakthrough in the North American market by strengthening its Energy Storage System (ESS) business and developing solid-state battery technology. Diplomatic movements, such as the President's tour of North America, could also influence Samsung SDI's business strategy. Daehan Electric Wire is receiving new evaluations, moving beyond being just a wire and cable company, as the importance of building power grids – the core infrastructure of the AI era – is highlighted. The rapid increase in power demand from the AI industry makes building high-capacity, high-efficiency power grids essential, thus increasing the role of power equipment companies like Daehan Electric Wire. South Korea's steel industry showed signs of recovery, hitting its low point in the first quarter. Gains are expected from the second quarter onwards due to intensified anti-dumping regulations and price increases, leading to improved profitability for steel companies. Potential changes in U.S. administration trade policy were also analyzed as a variable. The market explored investment opportunities by focusing on AI infrastructure, new growth industries, and strategic changes by major companies. The movements of 'Top 1%' investors provided clues for understanding short-term market trends and investor interests.