The Boom & Shock Index, an artificial intelligence (AI)-based equity risk management index.

The Boom & Shock Index, an artificial intelligence (AI)-based equity risk management index jointly developed by Maeil Economy and Kraft Technologies, reported a “0” in both its Korean and U.S. versions this week.

If the boom and shock index is 0-10, it means the cash stock is declining, 11-50 means neutral, and 51-100 means expansion.

The Korean version lowered the risk from 2 to 0. Although the Korean stock market is still sluggish, the AI ​​market weighs on the possibility of continuing a stable trend as the valuation burden is eased and there are expectations of a cut in US interest rates.

There is much optimism about a stock market recovery as the market has seen disappointing performances from major companies including Nvidia and recession fears have eased.

Lee Kyung-min, a researcher at Daishin Securities, said: “We expect the KOSPI to attempt a recovery in the first week of September, leaving behind the two-week short-term overheating resolution and the process of absorbing sales.” “The KOSPI is likely to surpass 2,700 on the confirmation of still strong export momentum in Korea, the recovery of the US manufacturing index and improving employment indicators.”

However, some advise caution with interest rate volatility.

Cho Byung-hyun, researcher at Daol Investment & Securities, said: “It is time for caution, as the mixed interpretation of the effect immediately after the first rate cut may rapidly increase interest rate volatility.” He added: “Risk management and defensive approaches are expected to be effective, and interest in dividends and shareholder returns may be increased.”

The US version was still not at any risk after last week.

After a 10% correction in early August, the US stock market recovered on the back of economic expansion, positive earnings and expectations of a rate cut by the US Federal Reserve (Fed). Although volatility is expected ahead of the presidential election in November, AI interprets the market reaction to the rate cut positively.

(Reporter Woo Soo Min)