With the U.S. 10-year Treasury yield surging to its highest level in three years, breaking above 5% intraday, the domestic stock market is walking on thin ice. On Wednesday, foreign investors shunned both KOSPI and KOSDAQ. This reflects growing investor caution ahead of the Federal Reserve System's base rate decision early on the 17th Korean time. Experts diagnosed that conditions for a bubble collapse have not yet been met.
The KOSPI index closed at 6,717.97, up 90.71 points (1.37%) from the previous day. The KOSPI opened at 6,611.24, down 16.02 points (0.24%), showing mixed trends with swings between weakness and strength in the early session before closing with a clear upward trend as gains widened over time.
In KOSPI, individual investors initially bought net alone but began exiting just 30 minutes after the market opened. Instead, funds flowed into institutional investors such as pension funds and financial investment firms. By market close, individuals and foreign investors sold stocks worth 1.611 trillion won and 1.4007 trillion won, respectively. Institutional investors purchased stocks worth 1.3425 trillion won, absorbing the selling volume.
This trend is analyzed as reflecting broader market macro conditions. The U.S. 10-year Treasury yield, a global interest rate benchmark, surpassed the 5th% level intraday on the 14th. This was the first time since October 2023 that yields exceeded 5%. The industry currently views this rise in rates as having broken through a psychological resistance line.
International oil prices are also surging. Saudi Arabia's east-west pipeline was closed due to Houthi rebel attacks from Yemen, and crude oil loading operations at the Red Sea Yanbu terminal were halted, intensifying upward pressure on oil prices.
Consequently, on the 15th (local time), November Brent crude futures settled at $108.75 per barrel, up 2.90% from the previous session at London's ICE Futures exchange. October WTI crude futures traded at $105.83 per barrel, up 4.38% over the same period, closing trading on the New York Mercantile Exchange.
Compounding these factors were concerns over the Federal Reserve System's base rate hike scheduled for Thursday (local time) and worries about AI speed regulation discussions.
Experts judged that while the likelihood of a September base rate hike by the U.S. Federal Reserve is virtually high, they dismissed concerns that this would halt the stock market rally or lead to a bubble collapse.
Kim Min-gyu, a researcher at KB Securities, said, "Since oil prices have surged sharply, the base effect will disappear after March next year, potentially easing supply-side inflationary pressure." He added, "The stock market has already reflected much of the uncertainty regarding interest rates following the outbreak of the U.S.-Iran war, so short-term shocks are unlikely to be significant."
Roh Dong-gil, a researcher at Shinhan Investment Corp., said, "Discussions on AI development speed regulation triggered by Anthropic's Dario Amodei have evolved into an agenda with continued support from major companies and management teams.
As AI model performance improves rapidly, concerns that it may escape human control are also growing." He noted, "Since the discussion on speed regulation has just begun, we cannot deny the possibility and impact of future international regulations based solely on recent strong corporate earnings, but conversely, it is also difficult to conclude that regulatory discussions alone will accelerate the peak of AI investment and semiconductor demand."
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