SEOUL, September 04 (AJP) - A signal from the U.S. Federal Reserve unwound a week of rate-driven positioning in Seoul on Friday, pulling money out of the bank stocks that had thrived on surging yields and back into memory chips.
The KOSPI closed 1.6 percent higher, adding 107.73 points to 6,687.21 for a second straight gain after Wednesday's near 4 percent collapse.
Samsung Electronics rose 2.2 percent to 255,500 won ($189) and SK hynix gained 3.2 percent to 1,647,000 won ($1,219). SK square, whose main asset is its stake in SK hynix, climbed 6.1 percent to 1,041,000 won ($771).
Bank shares moved the other way, with KB Financial falling 3.3 percent to 172,000 won ($127) and Shinhan Financial Group dropping 3.7 percent to 110,300 won ($82).
The trigger came overnight, when Fed Governor Christopher Waller said he could back holding rates steady at the Sept. 15 to 16 meeting if August inflation data keeps cooling. U.S. Treasury yields fell for a second session, with the 10-year note down three basis points to 4.761 percent. Futures-implied odds of a September increase slipped to roughly even from about 63 percent a day earlier. The August consumer price index has not been published.
Investors read Waller's remarks as reason to abandon the trade that had dominated the past week, when rising yields sent money into lenders and out of the two chipmakers that carry the index.
Individual investors sold into the rebound, unloading a net 3.72 trillion won ($2.76 billion) after buying through Wednesday's rout. Foreign investors bought a net 479.3 billion won ($355 million) and institutions a net 1.67 trillion won ($1.24 billion), though foreign buying faded through the afternoon from more than 1 trillion won at midday.
Advancers outnumbered decliners 549 to 309 on the main board.
The KOSDAQ ran its own rally, closing 3.0 percent higher at 813.50 for its first gain of that size in five sessions, after the government lifted a threat that had been hanging over the junior market's smallest companies.
The Ministry of Economy and Finance said Friday it would delay by six months a planned increase in the minimum market value a company must hold to keep its listing, and would let some firms facing removal transfer to KONEX, South Korea's third-tier board, without the liquidation trading period that normally guts their share price.
Appetite for small caps was tested the same day. Sky Labs, which makes a ring-shaped cuffless blood pressure monitor, closed its KOSDAQ debut at 23,500 won ($17.40), more than double the 10,000 won ($7.40) offer price it had been forced to set below its indicative range after institutional demand came in at 63 to 1.
Japan's Nikkei 225 closed 1.3 percent higher at 65,020.94, with SoftBank Group up 11.8 percent. The composite index in Shanghai edged lower.
The won strengthened against the dollar, with Hana Bank quoting 1,350.80 won, down 7.70 won from the previous session.
AJP Takeaways
- The KOSPI closed 1.6 percent higher at 6,687.21 on Friday, a second straight gain after Wednesday's near 4 percent collapse, as money moved out of bank stocks and back into memory chips.
- Fed Governor Christopher Waller said he could support holding rates steady at the Sept. 15 to 16 meeting if August inflation data keeps cooling, sending futures-implied odds of a September increase to roughly even from about 63 percent a day earlier.
- The Ministry of Economy and Finance said it would delay by six months a planned increase in the minimum market value required to keep a KOSDAQ listing, and the junior index rose 3.0 percent to 813.50.
- Sky Labs closed its KOSDAQ debut at 23,500 won ($17.40), more than double an offer price the company had been forced to set below its indicative range after institutional demand came in at 63 to 1.
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