[Opening Market] KOSPI Reclaims 5,700 on Semiconductor-Led Rally

The KOSPI index and stock prices of SK hynix and Samsung Electronics are displayed on an electronic board at the dealing room of Hana Bank’s headquarters in Jung-gu, Seoul, on Oct. 21. (Yonhap) The domestic stock market on Oct. 21 showed a refreshing start, rebounding from the previous day’s massive plunge. On the previous trading day, the KOSPI index plunged 3.73% to close at 5,552.74, pushed down by a combined selling offensive from foreign and institutional investors, thereby returning recent gains in a single day. However, in the New York stock market overnight, the NASDAQ Composite Index closed 1.11% higher as bargain hunting flowed in, centered on artificial intelligence (AI) and semiconductor sectors, and the Philadelphia Semiconductor Index also rose 1.61% for the first time in 9 trading days, supporting investor sentiment. Driven by this, both the KOSPI and KOSDAQ markets recorded a 1% range increase this morning, showing off strong recovery resilience in early trading. On this day, the KOSPI started trading at 5,666.34, up 113.60 points (2.05%) from the previous day, and is in a phase of rapidly digesting the previous day’s shock as low-end buying strongly flows in. The index has been expanding its gains since early trading, solidifying a stable trend, and large-cap technology stocks and the semiconductor sector, whose stock price support levels were shaken the previous day, are playing the vanguard role in pulling the index. Market experts diagnosed that investor sentiment is quickly regaining stability as the perception that the short-term drop was excessive spread, and the sustainability of artificial intelligence (AI) infrastructure investments by major global big tech companies was reaffirmed. The KOSDAQ also showed an upward trend, reclaiming the 800 level. The KOSDAQ opened at 793.40, up 11.43 points (1.46%) from the previous trading day, and is increasing its gains. Foreign and Institutional Buying vs. Retail Selling As of 10:00 a.m., in the domestic stock market, foreign and institutional investors who had largely exited the previous day are participating in low-end buying centered on some stocks or maintaining a wait-and-see attitude, while retail investors, unlike the previous day, are engaging in a tense battle between profit-taking and new buying. Unlike the previous trading day when retail investors showed net buying of about 900 billion won (about $679 million) to defend against the drop, a fierce trading battle is unfolding during today’s morning session to seize the initiative in supply and demand. Foreign investors are reacting to the news of the global semiconductor index rebound, showing moves to partially recover their net buying stance centered on major large-cap semiconductor stocks such as Samsung Electronics and SK hynix. Institutional investors are also adjusting the scale of supply and demand inflows while looking for low-end buying opportunities, centered on financial investment and pension funds. In early trading, foreigners are recording a net buying advantage in the KOSPI market, centered on the electrical and electronic sector, leading the index rebound, and institutions are also firmly consolidating the bottom of the index, accompanied by program buying. On the other hand, retail investors, who have felt fatigue from recent stock price volatility, are releasing profit-taking sales in some stocks, showing a sustained battle as of 10:00 a.m. In the KOSDAQ market, institutions and retail investors are showing net buying, while foreigners are showing a selling advantage. Top Market Cap Stocks Show Upward Trend Amid Recovery of Samsung Electronics and SK hynix The top core market capitalization stocks of the KOSPI have overcome the previous day’s sluggishness, successfully rebounding all at once and drawing an upward curve. Samsung Electronics, the domestic semiconductor leading stock, is showing a distinct recovery trend, rising more than 2.84% compared to the previous trading day. In the securities industry, analysis suggests that Samsung Electronics has preemptively secured about 80% of its scheduled memory production volume for next year through long-term agreements (LTA), and trust in its fundamentals, overcoming short-term performance concerns, is acting as a factor stimulating buying. In addition, SK hynix, another semiconductor protagonist, is also staging a surge of around 5% to 6%, recovering a significant portion of the previous day’s drop. For SK hynix, there were concerns about the impact of the exchange rate on its third-quarter performance, but investor sentiment improved rapidly as better-than-expected DRAM prices and solid shipment volumes were highlighted. Other major top KOSPI stocks are also evenly participating in the upward trend. Representative automobile stocks Hyundai Motor and Kia are showing a slight upward trend amid expectations of stabilization in global finished car demand, and secondary battery leading stocks such as LG Energy Solution and Samsung SDI are also recovering the previous day’s decline as bargain hunting flows in. Samsung Biologics and Celltrion in the bio sector are also maintaining a strong steady trend or higher based on stable supply and demand, supporting the KOSPI’s 3% range rebound (based on the opening market conditions of some media). The KOSDAQ market is also showing top market capitalization stocks simultaneously passing the hurdle of a rebound. Major pharmaceutical, bio, and materials, parts, and equipment stocks, including KOSDAQ leading stocks EcoPro BM and EcoPro, as well as Alteogen and Rainbow Robotics, are recording a 1% to 2% range increase, pushing the index upward. In particular, low-end buying is concentrated on artificial intelligence (AI) related materials, parts, and equipment companies that recently experienced large drops, strengthening the downward rigidity of the KOSDAQ index. Won/Dollar Exchange Rate Renews Yearly Low at 1,325 Won In the foreign exchange market on Oct. 21, the won-dollar exchange rate continues to face downward pressure, renewing its recent yearly low. On the previous trading day in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,328.1 won, moving near the lowest point of the year. In the early foreign exchange market on this day, the won-dollar exchange rate recorded 1,325.4 won at around 9:00 a.m., down 2.7 won from the previous day’s weekly closing price. The exchange rate continues its heavy trend as downward pressure on the global dollar and expectations of foreign investor capital inflow into the domestic stock market intertwine. In the Seoul foreign exchange market, A drop in the exchange rate (an increase in the value of the won) theoretically provides a favorable environment for the domestic stock market in terms of inducing foreign investors’ exchange gains, but it is a factor that can have mixed results in terms of the price competitiveness of export-oriented companies. However, the current foreign exchange market is showing a sideways trend near the yearly low rather than rapid volatility, displaying a stable pattern that keeps pace with the rebound trend of the domestic stock market. Overall, the domestic stock market today is unfolding its morning session with a strong rebound market led by large-cap semiconductor stocks, riding the relief of fatigue from the previous day’s excessive plunge and the warm breeze of the semiconductor sector’s rebound in the New York stock market. In the afternoon session as well, whether the supply and demand inflow from foreigners and institutions continues is expected to be the core variable determining the extent of the index’s additional upward movement.