South Korean stocks rebounded sharply on the 16th, a day after both main indexes plunged in what traders dubbed "Black Thursday." The KOSDAQ climbed fast enough to trigger a buy-side sidecar, while the KOSPI traced a clear upward curve led by large-cap shares.
As of 1:44 p.m. on the 16th, the KOSDAQ stood at 804.02, up 43.20 points, or 5.68%, from the previous session, according to the Korea Exchange. The exchange activated a buy-side sidecar on the KOSDAQ market at 12:55 p.m. as the index surged. A buy-side sidecar on the KOSDAQ is triggered when KOSDAQ 150 futures rise 6% or more and the KOSDAQ 150 index rises 3% or more from the previous session, with both conditions holding for one minute.
The KOSPI also advanced, trading at 5,771.89, up 217.67 points, or 3.92%, from the previous close. Most of the largest stocks by market value were higher, including Samsung Electronics, up 4.29%, and SK hynix, up 2.93%. Gains were steepest outside the chip sector, with Hanwha Aerospace up 8.37% and Samsung C&T up 8.22%. Hyundai Motor rose 7.95%, Samsung Biologics 6.17% and Celltrion 7.19%.
Both indexes had fallen steeply on the 15th as investor sentiment deteriorated rapidly. The KOSPI closed at 5,554.22, down 454.59 points, or 7.57%, while the KOSDAQ ended at 760.82, down 63.06 points, or 7.65%. On a closing basis, the KOSPI fell below its late-July low of 5,593.56 to its weakest level since April 7, when it finished at 5,494.78. It was the seventh straight session of declines, the longest such streak since Sept. 3-11, 2024, two years and one month earlier. Many large stocks tumbled, with Samsung Electronics down 9.48% and SK hynix down 11.06%.
Wall Street rebounded overnight, helped by a decline in U.S. Treasury yields. The Dow Jones Industrial Average rose 1.08%, the Standard & Poor's 500 gained 0.33% and the Nasdaq Composite added 0.08%. Caution toward artificial intelligence-related technology shares persisted, but money rotated into other sectors, lifting consumer-related names in particular. An improving economic outlook also supported the rebound, with the yield on the 10-year U.S. Treasury note falling to 5.086%.
Analysts said the recent selloff in South Korean stocks has been excessive relative to corporate earnings fundamentals. The Korean market has fallen 18.8% this month, a steeper drop than Japan's 3.5% decline and Taiwan's 2.0%. In a report published on the 16th, KB Securities said the KOSPI's plunge reflected excessive concern about an economic downturn and shrinking profits being priced in ahead of time. "Entering valuations comparable to those of a financial crisis can be interpreted as the process of building a second bottom for a W-shaped rebound, following the low of July 29," the brokerage said.
