▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an artificial intelligence-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six tailored news items for each reader type.
[Key Issue Briefing]
■ KOSPI Falls for Seventh Straight Session in Record Panic Selling: The KOSPI closed at 5,554.22 after declining for seven consecutive trading sessions since the 6th of this month, as the U.S. consumer price index shock combined with doubts over the profitability of AI investment triggered circuit breakers on both markets simultaneously. The KOSPI alone lost 1,193 trillion won in market value, a 20.7% decline that marked the steepest consecutive drop since the early stage of the COVID-19 pandemic in 2020.
■ Gartner Warns of $3.5 Trillion in AI Infrastructure Impairment: Gartner warned that $3.5 trillion in AI infrastructure investment faces impairment risk by 2030 and that more than 80% of neocloud providers will cease operations. CoreWeave shares plunged 15.5% and its probability of default within five years rose above 50%, bringing an AI credit crisis into view.
■ U.S. CPI Tops Forecasts, Reviving Rate-Hike Fears: The U.S. consumer price index rose 3.7% year-on-year in September, exceeding market forecasts, while the producer price index came in at 1.3%, double the consensus, spreading concern that high inflation is becoming entrenched. Ahead of this month's Federal Open Market Committee meeting, the perceived chance of a rate increase briefly climbed above 50%, sharply raising market uncertainty.
[News of Interest to Stock Investors]
1. 'Black Thursday': KOSPI Erases 410 Trillion Won in a Single Day
Key points: The KOSPI closed at 5,554.22, down 454.59 points, or 7.57%, from the previous session, triggering circuit breakers on both the KOSPI and KOSDAQ markets at the same time. Over the seven trading sessions since the 6th of this month, 1,193 trillion won in KOSPI market value has disappeared, and the 20.7% decline matched the record-setting scale of the early COVID-19 pandemic in 2020 (-20.5%). Samsung Electronics (005930.KS) fell 9.48% to 210,000 won and SK hynix (000660.KS) dropped 11.06% to 1.262 million won, both sinking to their lowest levels since April this year, while foreign investors sold a net 18.0686 trillion won over eight straight sessions. Financial authorities convened an emergency market review meeting and signaled the swift implementation of contingency plans, and the won closed at 1,344.6 against the dollar, up 6.3 won.
2. A Replay of July's Nightmare, With No Trigger for a Rebound
Key points: The KOSPI closed at 5,554.22 after seven consecutive losing sessions, repeating a pattern similar to the July rout this year, when the index tumbled 32.64%. With share buybacks by Samsung Electronics and SK hynix effectively concluded and retail investor sentiment weakened, there is no longer a buying base to absorb foreign selling. The KOSPI has fallen 5.5% below its 200-day moving average, and whether a death cross occurs — with the 50-day line crossing below the 200-day line — has emerged as a gauge of a longer-term downtrend. Analysts pointed to the next two weeks as the turning point for a rebound, citing data showing that 73.4% of the 124 breaks below the 200-day line since 1995 were recovered within two weeks.
3. $3.5 Trillion AI Impairment Warning as 80% of Neoclouds Seen Disappearing
Key points: Gartner warned that $3.5 trillion in AI infrastructure investment faces impairment risk by 2030 and that more than 80% of neocloud providers will cease operations. To generate the $8.5 trillion that hyperscalers need to meet a 12% return on invested capital, they would require more than double the up to $3.6 trillion in revenue actually projected. CoreWeave shares plunged 15.5% as its financial burden drew attention and its probability of default within five years passed 50%, with one extreme view holding that CoreWeave, which borrows to buy chips and build data centers, could see its share price fall to zero. Even though Anthropic's third-quarter revenue rose 45% from the previous quarter, the figure was read as a slowdown in growth, and doubts about AI monetization have shown little sign of easing.
[Reference News for Stock Investors]
4. Fed's Beige Book Also Flags Inflation, Adding to FOMC Pressure
Key points: The U.S. consumer price index rose 3.7% year-on-year in September, above market forecasts, while the producer price index came in at 1.3%, more than double the 0.6% consensus. The Federal Reserve's October Beige Book said the impact of rising oil prices is being passed through across supply chains, and a simultaneous rise in housing and services prices has made the entrenchment of high inflation more apparent. The International Monetary Fund projected that core inflation in the United States and Europe is unlikely to fall to 2% before mid-2028, and raised to 35% its estimated probability that global inflation will exceed 5% next year. The perceived probability of a rate increase at this month's FOMC meeting briefly climbed above 50% before easing to 27.1%, leaving uncertainty in place, while September retail sales rose 0.8%, double the 0.3% consensus, showing that consumer demand is also fueling inflation.
5. Pension Funds Sell 183.2 Billion Won Into the Slump, Nearing Limits of Buying Power
Key points: As the KOSPI plunged from 7,003.74 to 5,554.22 this month, pension funds sold a net 183.2 billion won across the KOSPI and KOSDAQ, effectively abandoning their role as a market backstop. Pension funds have sold 9.0256 trillion won on the KOSPI alone so far this year, and continued net selling in August (660.9 billion won) and September (582.1 billion won), when the market was range-bound, limiting the scope for a rebound. With the National Pension Service's domestic equity allocation above its holding limit of up to 28.8%, analysts estimated that the KOSPI would need to fall further, to between 5,100 and 5,200, before meaningful buying capacity emerges. Neither institutional nor retail flows are sufficient to absorb foreign investors' 18.0686 trillion won in net selling, deepening the vacuum in supply and demand.
6. HD Hyundai Expands Into AI Data Centers and Nuclear Power, Posting Record First-Half Results
Key points: HD Hyundai (267250.KS) posted first-half revenue of 42.0113 trillion won and operating profit of 6.9594 trillion won, its best results since its 2018 launch, with operating profit surging 187.0% from a year earlier. Cumulative orders for its HiMSEN engines for AI data centers surpassed 1.5 trillion won, and the company will invest 833.6 billion won through 2028 to build a new plant in Onsan-eup, Ulsan, expanding engine production capacity to 7.2 gigawatts by 2030. It is pouring a combined 1.4037 trillion won into new energy infrastructure businesses, including 238.6 billion won for small modular reactor facilities, broadening its footprint beyond shipbuilding into future energy markets. Still, weak order intake in special-purpose vessels, at just 12.1% of the annual target, and recurring labor disputes were cited as immediate challenges.
