Tesla, Soars 20% in a Day... Dancing Stock Market

Rebound Buying Amid US Treasury Yield Decline
Nasdaq Index Surges 4% Intraday
KOSPI Fluctuates Around 3000 Level

[Asia Economy New York=Correspondents Baek Jong-min and Ji Yeon-jin]

[Image source=Reuters Yonhap News]

The stock price of US electric vehicle maker Tesla, which was feared to decline further until the day before, rebounded sharply with a 20% rise. Leading Tesla, the Nasdaq index, centered on tech stocks, also surged by as much as 4% during the session.

As concerns over the rise in US Treasury yields, which had been holding back growth stocks, melted away, risk asset investment sentiment reignited. However, there are also assessments that the rebound will be limited. While the domestic stock market is also showing signs of recovery following the Nasdaq's sharp rise, the extent is not large.

On the 9th (local time) at the New York Stock Exchange, the Nasdaq index closed at 13,073.82, soaring 464.66 points (3.69%). Major tech stocks such as Apple, Facebook, Amazon, and Alphabet also rose around 4%.

The Dow Jones Industrial Average also recorded an all-time high at the close, but the rate of increase slowed. Financial and energy sectors, which had recently shown strength amid economic recovery expectations reflecting inflation concerns, all turned weak.

Although the Nasdaq was considered to have entered a correction zone due to a sharp decline the day before, it recorded the highest daily gain since November last year, proving that interest in growth stocks has not disappeared.

Tesla's sharp fluctuations exemplify the ups and downs of growth stocks. Tesla had fallen by as much as 35% from its early-year peak until the day before due to various negative factors. However, most of these adverse factors were resolved on that day, causing the stock price to jump significantly.

Concerns about Tesla's market share decline were alleviated by strong sales in China and an analysis report forecasting long-term profitability improvement. The Bitcoin price entering the $54,000 range also fueled Tesla's rise.

The surge in tech stocks also lifted the ARK Innovation Exchange-Traded Fund (ETF), known as a symbol of tech stock investment, by 7%. The Wall Street Journal reported that low-price buying inflows occurred amid expectations that growth stocks would continue to grow even as COVID-19 lockdowns ease.

Greg Boot, Chief US Equity Strategist at BNP Paribas, explained that "a rebound buying wave occurred due to excessive overselling." However, some experts advised that the stock price rise on that day was influenced by short covering to reclaim short sales, suggesting that the future rise may be limited.

On the morning of the same day in the Korean stock market, the KOSPI is battling around the 3,000-point level. The rate of increase has not exceeded 1%. As of 10:20 a.m., individual investors are leading the rebound with net purchases in the 100 billion won range, but foreigners with net sales of about 90 billion won and institutions with net sales of about 13 billion won are holding back the index.

This content was produced with the assistance of AI translation services.