STOCKS | Goldman Sachs Strategist Expects Rebound After Kospi Falls 8.8% and Triggers Circuit Breaker

A Goldman Sachs Asia-Pacific equity strategist said South Korean stocks are expected to rebound after a sharp decline that triggered a circuit breaker. According to Odaily, Goldman Sachs Asia-Pacific chief equity strategist Timothy Moe said the drop is likely to prove a technical pullback over the longer term, adding that fundamentals remain strong. The Kospi index fell as much as 8.8% on Monday, leading declines in Asian technology shares. The selloff followed a strong rally driven by optimism around artificial intelligence, during which many investors used leverage to chase gains in a small group of semiconductor and technology stocks. Moe said there are clear signs of rising speculative activity, particularly among South Korean retail investors who have been buying leveraged ETFs. He said the market is now seeing forced selling of accumulated positions, with leverage amplifying the decline. Goldman Sachs raised its outlook for South Korean and Taiwanese equities last week, citing expectations that the AI boom will drive profit growth in these technology-heavy markets. Moe said on Monday that valuations for South Korean stocks are reasonable and that potential earnings are expected to continue supporting growth.