The KOSPI, which fell more than 4% early in the session on a plunge in U.S. chip stocks, closed higher as bargain hunting by retail and institutional investors lifted the index. Samsung Electronics (005930.KS) and SK hynix (000660.KS) recovered their losses, while a rotation into financial, energy and cosmetics shares pushed the benchmark up.
The KOSPI closed at 6,742.74, up 45.78 points, or 0.68%, from the previous session, the Korea Exchange said on the 25th. The index opened at 6,535.93, down 161.03 points, or 2.40%, and fell as low as 6,408.82 during the session before turning higher in the afternoon.
Combined buying by retail and institutional investors drove the rebound. Institutions bought a net 1.22 trillion won ($845 million) on the main board, while retail investors bought a net 1.15 trillion won ($795 million). Foreign investors, by contrast, sold a net 3.95 trillion won ($2.7 billion), capping the index's gains.
Investor sentiment recovered as large-cap chip stocks recouped their early losses. Samsung Electronics closed flat at 257,000 won, while SK hynix turned higher, rising 0.42% to 1.678 million won. Shortly after the open, Samsung Electronics and SK hynix had fallen nearly 4% and 6%, respectively.
An across-the-board decline in memory chip stocks on Wall Street overnight had dragged down the domestic market early in the session. Caution ahead of Nvidia's earnings report combined with news of an imminent initial public offering by Chinese NAND flash maker Yangtze Memory Technologies (YMTC) sent SanDisk down 6.5% and Micron down 5.8%. An assessment that the shareholder return plan Samsung Electronics announced the previous day fell short of market expectations also added to selling pressure.
Still, the market drew support as long-term interest rates stabilized amid attention to the U.S. Treasury's expanded bond buybacks and the possibility of liquidity provision through the Treasury General Account (TGA). Analysts said additional U.S. economic sanctions on Iran did not include a specific timeline for implementation and that a tariff dispute with Canada would have limited immediate impact on the market.
Buying spread to large-cap stocks beyond chipmakers. Samsung Electro-Mechanics closed up 3.34% at 1.362 million won, while Hyundai Motor rose 1.69%. Samsung Biologics and Samsung C&T gained 0.76% and 0.69%, respectively. LG Energy Solution, by contrast, fell 3.45% and SK Square dropped 1.49%.
Energy and construction shares were strong on expectations for the first U.S. investment project, whose announcement is slated for next month. Hanwha, which resumed trading after completing a spin-off, also surged 17.4%. Financial and cosmetics stocks likewise held firm as rotational buying flowed in.
The KOSDAQ closed at 827.15, up 13.82 points, or 1.70%, from the previous session. The index opened at 806.93, down 0.79%, and slipped to around the 798 level during the session before turning higher on buying by foreign and institutional investors.
"The key to the market is liquidity and chips," said Kang Jin-hyuk, an analyst at Shinhan Securities. "After a gap-down centered on chip stocks, rotational buying into large caps flowed in, allowing the KOSPI to recover its losses quickly."
