The KOSPI index rebounded over 5% to recover the 6800 mark, driven by a buying spree from foreign investors following a more than 5% drop the previous day. A large-scale shareholder return policy from SK Hynix, involving a 40 trillion won stock buyback and cancellation, revitalized investor sentiment in semiconductor stocks, leading to gains in major companies like Samsung Electronics and SK Hynix. The KOSDAQ also rose nearly 2% in response.
According to the Korea Exchange, the KOSPI closed at 6852.58, up 381.41 points (5.89%) from the previous trading day.
The index opened at 6680.34, up 209.17 points (3.23%), and continued to climb as foreign buying surged from the start of the session. At 9:57 a.m., the KOSPI 200 futures price spiked, triggering a buying sidecar. Strong buying continued, particularly in semiconductor stocks, pushing the index above 6800 during the day.
On this day, foreign investors led the index's rise with a net purchase of 23.828 billion won, while individuals and institutions sold a net 27.525 billion won and 6.415 billion won, respectively.
Semiconductor stocks were particularly strong, driving the index higher. After the market closed the previous day, SK Hynix announced it would buy back and cancel 40 trillion won worth of its own shares over the next three months, significantly improving investor sentiment. This buyback represents about 3.3% of the total shares outstanding and increased the shareholder return ratio from within 50% of existing free cash flow (FCF) to over 50%.
Expectations grew that Samsung Electronics would also announce a large-scale shareholder return policy, contributing to its upward trend. The influx of bargain buying in large semiconductor stocks, combined with expectations for enhanced shareholder returns, spread buying interest across the semiconductor sector.
The easing of rising long-term U.S. Treasury yields also supported a preference for risk assets. The U.S. Treasury expanded its buyback of government bonds in response to the surge in long-term bond yields, leading to a decline in U.S. long-term rates, which attracted buying interest back into the domestic market after the previous day's sharp drop.
However, uncertainties remain, including the Federal Reserve's hawkish stance and potential inflationary pressures from increased investment in artificial intelligence (AI), which could limit the extent of the gains.
Among the top market capitalization stocks, Samsung Electronics (up 9.49%), SK Hynix (up 12.73%), SK Square (up 11.85%), Samsung Electro-Mechanics (up 0.65%), Hyundai Motor (up 0.85%), LG Energy Solution (up 0.14%), Samsung Biologics (up 1.94%), Samsung C&T (up 7.78%), and Samsung Life Insurance (up 7.61%) all saw gains.
Notably, SK Hynix surged over 12%, recovering much of the previous day's losses, while Samsung Electronics rose by over 9%. The anticipated increase in SK Hynix's share value also boosted SK Square by more than 11%.
The KOSDAQ index closed at 840.89, up 16.43 points (1.99%) from the previous trading day.
In the KOSDAQ market, institutions were net buyers of 1.209 billion won, while individuals and foreigners sold a net 970 million won and 1.233 billion won, respectively.
Among the top market capitalization stocks, Alteogen (up 11.86%), EcoPro (up 2.20%), EcoPro BM (up 3.92%), Rainbow Robotics (up 1.95%), JUSUNG Engineering (up 3.32%), Wonik IPS (up 4.21%), Rino Technology (up 2.36%), and ABL Bio (up 3.51%) all experienced gains.
Lee Kyung-min, a researcher at Daishin Securities, stated, "The domestic market showed strength as buying interest surged following the previous day's sharp decline. The announcement of SK Hynix's large-scale stock buyback and cancellation reversed investor sentiment in the semiconductor sector, and expectations for additional shareholder returns from Samsung Electronics contributed to the index's rise."
He added, "The decline in U.S. long-term rates due to the Treasury's expanded buyback also helped alleviate external uncertainties. However, with ongoing inflation concerns highlighted in the July FOMC minutes and the potential for increased inflationary pressures from AI infrastructure investments, it is essential to monitor the resilience of risk asset preferences and the momentum of the stock market's rise."
* This article has been translated by AI.
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