The KOSPI closed higher on the 23rd, recovering from a sharp early drop driven by concerns over artificial intelligence investment in the U.S. SK hynix (000660.KS) pushed the index up late in the session after it halted a review of a U.S. initial public offering for its subsidiary Solidigm, easing worries about duplicate listings, while institutional buying provided further support.
The KOSPI ended at 5,550.30, up 16.53 points or 0.30% from the previous session, according to the Korea Exchange. The index opened at 5,403.17, down 130.60 points or 2.36%, and fell as low as 5,305.98 in early trading, widening its loss to 4.12%. The overnight slide in U.S. technology shares weighed heavily at the open. Nvidia, Micron and other chip stocks declined after concerns mounted over Meta's deteriorating cash flow and the funding burden from its large-scale AI investments, sending the Philadelphia Semiconductor Index down more than 6%.
Korean stocks then steadily trimmed losses through the session as investors judged the decline excessive and individual corporate news turned positive, finally moving into positive territory just before the close.
SK hynix was at the center of the rebound. After falling more than 5% early in the session, the stock reversed course to close up 4.42%. Samsung Electronics (005930.KS) also recovered from its losses to rise 0.47%, while SK Square (402340.KS) gained 3.20%.
SK hynix's pre-market announcement that it was halting its review of a Solidigm IPO is seen as having helped restore investor sentiment. The company said in a regulatory filing that it had been reviewing various funding options to expand Solidigm's production capacity and strengthen its competitiveness, but that it was halting both pre-IPO investment and IPO reviews after taking capital market conditions and other factors into comprehensive consideration.
Solidigm was launched when SK hynix acquired Intel's NAND flash and solid-state drive business in 2021. After news of the review of a U.S. listing emerged, the market raised concerns that a duplicate listing would erode value for existing shareholders and lead to a valuation discount. Financial regulators had also said that an overseas listing of Solidigm would fall under rules governing duplicate listings.
Analysts said the decision could lead to a stronger shareholder return policy at SK hynix. "The company has declared that enhancing shareholder value is its top priority, ahead of the growth strategy it had envisioned," said Kim Sun-woo, an analyst at Meritz Securities (008560.KS). Kim added that there was a strong chance the company would present shareholder return measures exceeding earlier expectations at its third-quarter earnings call scheduled for the 28th.
Institutions and retail investors drove the index higher. On the main board, foreign investors sold a net 1.0938 trillion won, while institutions and retail investors bought a net 795.5 billion won and 233.6 billion won, respectively, cushioning the index.
Large-cap stocks were mixed, however. Samsung Biologics (207940.KS) surged 7.71% and Samsung Life Insurance (032830.KS) rose 1.45%. On the other side, LG Energy Solution (373220.KS) fell 1.79%, Samsung Electro-Mechanics (009150.KS) dropped 2.01%, Hyundai Motor (005380.KS) declined 1.99% and KB Financial Group (105560.KS) slid 3.29%.
The KOSDAQ also pared some of its intraday losses but failed to turn positive. The index closed at 751.69, down 12.41 points or 1.62% from the previous session. It opened at 748.32 and extended losses during the session before buying interest in the afternoon lifted it back above the 750 level.
On the KOSDAQ, foreign investors and institutions sold a net 29.0 billion won and 21.4 billion won, respectively, while retail investors bought a net 46.2 billion won.
