Key Takeaways
- South Korean shares rebounded from a seven-week low.
- Heavyweight chipmakers, including Samsung Electronics and SK Hynix, saw gains.
- Tech buying drove the market, with Apple’s spending plans supporting semiconductor stocks.
South Korean shares experienced a significant recovery on Thursday, rebounding from a seven-week low. The benchmark KOSPI index closed up 45.12 points or 0.62%, at 7,291.91, after swinging between gains of 4.1% and losses of 2.5% during the session.
The market's volatility was evident as it had fallen to its lowest close since May 20th, down more than 20% from a record-peak hit in late June, which is typically considered a confirmation of a bear market. This decline prompted concerns among analysts and investors alike.
Lee Kyoung-min, an analyst at Daishin Securities, commented on the market's behavior: 'Volatility heightened again, with the index erasing gains as retail investors sold shares on profit-taking pressure and worries around the chip sector.'
Despite the overall downturn, tech-heavy companies such as Samsung Electronics and SK Hynix saw modest gains. Samsung Electronics rose 0.18%, while SK Hynix gained 5.30%. These gains were partly attributed to positive developments in the semiconductor industry.
Apple’s commitment to spend over $30 billion on chip supply agreements with US companies, including Broadcom, which climbed 2.2%, also contributed to the market's recovery. This spending plan is expected to bolster the tech sector and provide a boost to South Korean firms involved in chip manufacturing.
However, not all tech companies saw gains; LG Energy Solution, a battery maker, declined by 0.63%. The overall market performance was mixed, with 237 shares advancing while 652 declined among the total 913 traded issues.
Foreign investors were net buyers of South Korean shares worth 137.5 billion won ($91.14 million), indicating a positive sentiment from international markets. In contrast, retail investors sold 1.3 trillion won, reflecting their cautious approach to the market's volatility.
The currency also saw some movement, with the won quoted at 1,506.1 per dollar on the onshore settlement platform, down 0.25% from its previous close of 1,502.4. Bond yields remained stable, with the most liquid three-year Korean treasury bond yield remaining flat at 3.776%, while the benchmark 10-year yield fell by 0.8 basis points to 4.240%.
'Volatility heightened again, with the index erasing gains as retail investors sold shares on profit-taking pressure and worries around the chip sector.'
Lee Kyoung-min, Analyst at Daishin Securities
