KOSPI Rebounds 0.62% as Institutions Absorb Retail Selloff

Korea's stock market posted gains after extreme volatility, buoyed by combined buying from foreign and institutional investors, on an options expiry day and just one day before the U.S. American Depositary Receipt (ADR) listing of SK hynix (000660.KS). Despite large-scale selling by individual investors for a second consecutive day, the market closed higher, prompting optimism that the recently plunging index has confirmed its bottom.

According to the Korea Exchange on the 9th, the KOSPI closed at 7,291.91, up 45.12 points, or 0.62%, from the previous trading day. The index staged a roller-coaster session, soaring to 7,543.86 early in the day on bargain hunting in semiconductors, before at one point falling to 7,063.76 as options expiry selling pressure combined with the risk of Middle East hostilities. The KOSDAQ index also closed at 794.00, up 9.00 points, or 1.15%, from the previous session. Although it rebounded, it fell short of holding the 800 line it had recovered during the session, leaving some disappointment.

On the KOSPI that day, individuals net sold 1.3307 trillion won. Foreigners net bought 137.5 billion won and institutions net bought 1.2879 trillion won, fully absorbing the selling volume. On the KOSDAQ as well, individuals sold 320.5 billion won, but institutions bought 307.2 billion won and foreigners bought 21.8 billion won, defending against the decline. Individuals net sold for a second consecutive day, following 394.1 billion won the previous day, in a structure where foreigners and institutions absorbed the volume, resulting in a handover of shares.

Samsung Electronics (005930.KS), the top stock by market capitalization, experienced fluctuations including turning weak during the session, but narrowly closed higher at 278,000 won, up 0.18% on a closing basis. In contrast, SK hynix, which drew a blockbuster response of seven times the offering volume in demand forecasting, closed at 2.186 million won, up 5.30%, showing a divergence in fortunes among semiconductor leaders. SK Square (up 4.49%) and Hanmi Semiconductor (up 8.18%) also showed gains, and Samsung Electro-Mechanics rose 0.95% on expectations of a recovery in the multilayer ceramic capacitor (MLCC) market. However, Hyundai Motor Group stocks, including Hyundai Motor (005380.KS) (down 3.68%) and Kia (down 7.65%), as well as defense stock Hanwha Aerospace (down 8.45%), were sidelined.

That day, New York stock index futures rose slightly despite news of a second day of hostilities between the United States and Iran, while Japan's Nikkei index rose 1.48% on news that Rapidus had thrown down the gauntlet to TSMC with price competitiveness. China's Shanghai index also closed in slightly positive territory on news of a rebound in the June consumer price index (CPI).

Market experts positively assessed the buying inflow driven by undervaluation appeal, even amid weakened sentiment from continued uncertainty stemming from the Middle East. Lee Kyoung-min, a researcher at Daishin Securities, said, "The domestic market, which opened higher on bargain-hunting buying inflow in the semiconductor sector, repeatedly rose and fell without direction due to continued Middle East noise and supply-demand volatility." He added, "As mixed news between the United States and Iran was reported one after another and uncertainty persisted, the domestic market repeatedly rose and fell around the 7,200 line while searching for direction."