[Closing Market] KOSPI Rebounds Above 5,550 After Sharp Intraday Drop

A display board at the dealing room of Hana Bank’s headquarters in Jung-gu, Seoul, showing won/dollar exchange rate, the KOSPI and KOSDAQ closing prices on Oct. 23. (Yonhap) On Oct. 23, the domestic stock market overcame the intense volatility caused by the shock from United States tech stocks and the emergence of intraday selling pressure, successfully staging a dramatic rebound to close the trading session. According to the Korea Exchange on this day, the KOSPI index closed trading at 5,550.30, up 16.53 points (0.30%) from the previous trading day. After opening at 5,403.17, which was down 130.60 points (2.36%) from the previous session, the index plummeted to near the 5,300 mark (a plunge of over 4%) at one point in early trading, driving investors into panic due to concerns over the profitability of United States AI investments and the aftermath of surging international oil prices. However, entering the afternoon session, low-end buying steeply flowed in, centered around large-cap semiconductor stocks, completely recovering the decline, and the index instead reversed to an upward trend, settling above the 5,550 mark. Considering the ‘Panic Selling’ phase in early trading, it was a highly dramatic reversal showcase. On the other hand, the KOSDAQ market closed lower after intraday fluctuations. The KOSDAQ, which started at 748.32, down 15.78 points (2.07%) from the previous session, closed the trading session at 751.69, down 12.41 points (1.62%) from the previous session. The KOSDAQ closed lower as its defense against the departure of foreign supply and demand was relatively weakened compared to KOSPI large-cap stocks. Foreigners’ Net Selling Vs. Individuals’ and Institutions’ Net Buying Looking at each investor entity, foreigners induced the index decline by net selling 994.1 billion won (about $750.49 million), but institutions and individuals led the index rise by net buying 872.3 billion won and 52.7 billion won, respectively. Foreign investors led the index decline by launching a large-scale selling offensive in early trading, but entering the afternoon, they created a volatile market by bringing in some low-end buying centered around blue-chip stocks with excessive drops or adjusting the extent of their selling. Institutional investors pressured the index with the emergence of program selling volumes early on, but in the process of the lower end of the index being supported, defensive buying and profit-taking intersected, centered around pension funds and financial investments. When the index plummeted to the 5,300 mark, individual investors engaged in aggressive ‘low-end buying (the potential of the Donghak Ant Movement)’ and played a leading role in pulling up the index. The massive liquidity brought in by individuals became a decisive turning point in securing downward rigidity. In the KOSDAQ market, individuals bought 63.1 billion won, while foreigners and institutions sold off 41.6 billion won and 24.8 billion won, respectively. Top Large-Cap Stocks Including Samsung Electronics and SK hynix Defend Well or Rebound Strongly Based on Closing Prices Top large-cap stocks by market capitalization overcame the intraday plunging trend and recorded a strong defense or a strong rebound based on closing prices. SK Hynix was the hottest star of the market on this day. Although it underwent a significant correction during trading hours due to concerns related to high bandwidth memory (HBM) and AI infrastructure, it closed at 1,277,000 won, surging 4.42%, as low-end buying strongly flocked in, proving its potential near its new high. Samsung Electronics barely succeeded in closing higher, finishing trading at 215,500 won, up 0.47% from the previous session, as buying flowed in despite unstable trends during trading hours. In the process of the rapid index rebound, major finished car manufacturers such as Hyundai Motor and Kia, along with some large-cap battery and heavy industry stocks, also hit intraday lows and recovered most of their declines or transitioned to a strong flat trend, helping to defend the 5,500 mark of the index. Specifically, SK Square (3.20%), Samsung Biologics (7.71%), and Samsung Life Insurance (1.45%) rose, while Samsung Electronics Preference Shares (0.48%) closed strong flat. On the other hand, LG Energy Solution (-1.79%), Samsung Electro-Mechanics (-2.01%), Hyundai Motor (-1.99%), and KB Financial Group (-3.29%) fell. In the KOSDAQ market, secondary battery stock groups such as EcoPro BM and EcoPro along with representative pharmaceutical and biotech stocks like Alteogen, attempted to rebound during trading hours, but failed to completely turn around the investment sentiment of the entire index and closed the trading session with overall weakness. Among the top 10 KOSDAQ stocks by market capitalization, the blue light flashed, indicating losses, for 9 stocks excluding HLB (0.73%). The weakness of EcoPro (-5.83%) and EcoPro BM (-5.50%) was highlighted, while Alteogen (-2.81%), Jusung Engineering (-3.64%), Rainbow Robotics (-3.42%), EO Technics (-1.46%), Leeno Industrial (-4.05%), Wonik IPS (-0.93%), and Samchundang Pharm (-0.65%) declined. Won-Dollar Exchange Rate Closes Weekly Regular Trading at 1,324.6 Won In the Seoul foreign exchange market, the won-dollar exchange rate faced slight upward pressure (weakness of the won) compared to the previous session amid an atmosphere favoring global safe assets and a sense of caution over the departure of foreign funds early in the week. However, as stock prices showed a dramatic rebounding trend at the end of the trading session and the panic sentiment across the stock market subsided, the exchange rate closed slightly flat and slightly higher at 1,324.6 won based on the weekly regular trading close, showing that additional surging trends were restricted. The domestic stock market on this day can be summarized as ‘panic in early trading and a miracle in late trading’. Due to the aftermath of the tech stock correction in the United States stock market and anxiety over AI infrastructure financing, the KOSPI plummeted nearly 4% during trading hours, threatening the 5,300 mark, but the solid fundamentals of the domestic stock market and the complex inflow of supply and demand from individuals, institutions, and foreigners aiming for low-end buying reverted the index back above the 5,550 mark. In particular, SK hynix leading the rebound with a surging trend of over 4.00% and Samsung Electronics closing slightly higher served as an opportunity to reaffirm the potential of the domestic semiconductor sector. As volatility was extreme ahead of the weekend, it is a time that requires a cautious approach while paying attention to future changes in global macroeconomic indicators and the continuity of foreign supply and demand.