November Global Market Correction and December Year-End Outlook
As expected, November 2024 saw substantial volatility and continued market correction. After recording the strongest monthly gain in 25 years during October, profit-taking increased, pushing the market into a natural correction phase. Considering the current trend, there is a high possibility that the period of correction will continue through December, and retail investors should focus on preparing for early next year rather than rushing into trades.
Comparison of Global Market Declines and Semiconductor-Led Correction
Major global markets mostly weakened in November. The Nasdaq fell 4%, Japan and Taiwan dropped about 5%, and Korea’s KOSDAQ recorded a relatively steep decline of 6.6%. Notably, the Philadelphia Semiconductor Index plunged 7.8%, directly impacting Korea’s market and contributing to an 8.7% drop in the KOSPI.
Key Korean semiconductor stocks such as Samsung Electronics and SK Hynix experienced a significant surge in selling pressure as short-term profit-taking intensified after rapid gains, resulting in a substantial increase in supply-demand burden. The Philadelphia Semiconductor Index ETF also failed to break its long-term trend resistance and has fallen for three consecutive weeks, indicating a short-term pattern shift. This suggests that sideways movement or mild rebounds are more likely than a V-shaped recovery.
Foreign Investor Flow Shift: 12T Buy → 14T Sell
Foreign investors bought 12 trillion KRW worth of KOSPI shares during September and October. However, in November alone, they have sold more than 14 trillion KRW, showing intense selling pressure. This implies that major institutional investors have begun executing strong sell strategies targeting specific sectors.
The market is currently distorted as Samsung Electronics and SK Hynix — essentially “two whales in a pond” — dominate trading volume. More than half of KOSPI trading value is concentrated in these two stocks, meaning capital is not spreading to other sectors at all.
Retail investors are absorbing the bulk of foreign sell-off in SK Hynix, while securities firms’ aggressively raised target prices are fueling a FOMO cycle among individuals.
“Large-Cap Stocks with Increased Weight” — Caution for Samsung & Hynix Investors
Samsung Electronics and SK Hynix have seen massive increases in market cap from their lows. Much like a “fat pig” analogy, the heavier they become, the harder it is for them to move sharply upward. Therefore, instead of expecting rapid short-term gains, a long-term perspective and staggered buying strategy are essential.
Recommended Allocation
- Large-cap semiconductor allocation: around 10% of total capital
- Maintain staggered buying principles
- Diversify into other growth sectors such as secondary batteries
Secondary Battery Sector: A Buy-the-Dip Opportunity Arrives
The global lithium battery ETF (LIT) typically leads Korea’s secondary battery index by about one month. Recently, LIT broke above its 2023 high with a strong rebound, while domestic secondary battery stocks remain in a correction. This indicates that Korean secondary battery stocks are in a “delayed movement zone,” preparing for a rise.
Additionally, major companies such as LG Energy Solution, LG Chem, and Samsung SDI are seeing continuous declines in short-selling balances. This suggests short sellers are covering positions, easing selling pressure. Foreign investors are also consistently buying or at least not selling secondary battery stocks.
The recent decline is merely a market-wide correction triggered by semiconductor pullbacks, not a reflection of fundamental issues in the battery sector. Therefore, looking ahead to next year, this is judged to be a mid-term buying opportunity.
Rising Margin Debt and Retail Investors' Misguided Decisions
Although deposit balances have fallen by more than 10 trillion KRW, margin loan balances have increased. This means retail investors are selling other stocks at a loss and using margin to chase semiconductor large-caps. Such behavior can signal a further downward incentive for institutional and foreign investors.
December Strategy: Focus Less on Profit, More on Positioning for Opportunity
The current correction likely continues through December. However, this phase is more of an opportunity than a crisis. The end of the year is not a period for immediate profit, but a time to prepare strategic positions for early next year. Once the supply-demand imbalance eases, stocks outside semiconductor giants have strong potential for rotation-led gains.
Key December Strategies
- Avoid chasing rallies
- Rebuild portfolio with staggered entry
- Maintain interest in secondary battery, AI, and new-growth sectors
- Secure cash for early-year rally opportunities
Conclusion
The market is currently in correction, but the greater the fear, the greater the opportunity. As semiconductor concentration eases and supply-demand stabilizes, the currently neglected sectors are likely to rebound first. Remember: the year-end market is not a period to “earn profits now,” but a period to “prepare to earn profits next year.”