Korean stocks attempted a rebound in premarket trading as the rise in U.S. Treasury yields eased. Samsung Electronics (005930.KS) and SK hynix (000660.KS) both gained more than 2%, with bargain hunting emerging after five straight sessions of sharp declines.
Samsung Electronics traded at 237,500 won, up 2.37% from the previous session, as of 8:01 a.m. on the 14th, according to alternative trading system Nextrade (NXT). SK hynix rose 2.63% to 1.481 million won. SK Square (402340.KS) gained 2.92% and Samsung Electro-Mechanics (009150.KS) rose 2.93%. LG Energy Solution (373220.KS) fell 0.12%, Hyundai Motor (005380.KS) dropped 0.48% and KB Financial Group (105560.KS) slipped 0.25%.
The stabilization in U.S. Treasury yields helped restore investor sentiment. On the 13th, New York stocks opened lower on weakness in memory chip stocks and the burden of rising international oil prices, but trimmed losses later in the session. Federal Reserve Governor Christopher Waller said high Treasury yields were curbing demand in rate-sensitive sectors, partly substituting for monetary tightening. New York Federal Reserve President John Williams also ruled out the need for additional rate increases next year, sending long-term Treasury yields lower. Gains in Nvidia and AMD also supported sentiment toward technology shares.
In the domestic market, expectations grew for buying on the recent plunge. The KOSPI closed at 6,035.35 on the 13th, down 348.89 points, or 5.46%, from the previous session. The index briefly fell to 5,911.11, breaking below the 6,000 level, before recovering part of its losses late in the session. The KOSPI has declined for five consecutive sessions since the 6th of this month, bringing its cumulative loss to 13.83%. The scale of the daily declines also widened over that period.
Large-cap chip stocks were at the center of the plunge. On the 13th, Samsung Electronics closed down 7.39% at 232,000 won, while SK hynix tumbled 10.09% to 1.443 million won. Sentiment weakened as concerns over the technological catch-up by Chinese memory chipmaker ChangXin Memory Technologies (CXMT) combined with funding pressures from expanded artificial intelligence infrastructure investment. Worries about a supply-demand vacuum following the end of share buybacks at Samsung Electronics and SK hynix also weighed on the market. Foreign investors sold a net 4.5259 trillion won on the main board the previous day, marking a sixth straight session of net selling.
Brokerages are leaning toward the possibility of a technical rebound, given the excessive short-term decline. According to Kiwoom Securities (039490.KS), in the 10 largest cases of five-session consecutive KOSPI plunges in the past, average returns over the following 20 and 60 trading sessions were 3.2% and 8.2%, respectively. Still, the durability of any rebound remains uncertain ahead of the U.S. September consumer price index release and earnings reports from major chipmakers. Han Ji-young, a researcher at Kiwoom Securities, said the market is expected to attempt a rebound, helped by inflows of bargain hunting after the chain of sharp declines over the past five sessions.
