▲ The KOSPI is displayed at the dealing room of the Hana Bank headquarters in Seoul on the 5th. The KOSPI opened sharply higher and recovered the 6,600 level in early trading.
The KOSPI, which had shown a breathing spell following historic crashes and surges, is gathering upward momentum fueled by a semiconductor boom originating from the United States.
The Kosdaq also maintained its strength, rising more than 2% after surging 21% in a short period with buy sidecars triggered for three consecutive trading days recently.
According to the Korea Exchange, the KOSPI closed up 239.31 points (3.76%) at 6,598.26 compared to the previous session.
Opening up 3.85% at 6,603.48, the index once soared as high as 4.96% to 6,674.66.
During this process, a buy sidecar was triggered in the main bourse due to fluctuations in the KOSPI 200 futures index, temporarily halting the execution of program purchase quotes for five minutes.
Samsung Electronics and SK Hynix, the two top players in the domestic stock market, led the index gains by rising 2.50% and 5.77%, respectively.
Foreigners were net buyers in the main bourse, purchasing 1.4514 trillion won on their own.
Individuals and institutions were net sellers, offloading 1.1854 trillion won and 280.2 billion won, respectively.
Among institutional flows, private equity (519.4 billion won) net selling stood out, while financial investment (137.9 billion won) and trust companies (110.1 billion won) recorded a buying dominance.
Despite the sharp index gain, the KOSPI 200 Volatility Index (VKOSPI), referred to as the Korean fear gauge, plunged 4.27% from the previous session to close at 78.55, dropping back into the 70s for the first time in seven trading sessions since the 27th of last month.
The atmosphere in which the three major U.S. stock indices rose together overnight amid the strength of semiconductor stocks spilled over into the domestic market.
The Dow Jones Industrial Average and the S&P 500 index hit record highs, rising 1.71% and 1.79%, respectively, while the Nasdaq Composite Index also jumped 2.59%.
The sentiment was led by a plunge in international oil prices—as U.S. government officials, including Treasury Secretary Scott Bessent, signaled that an agreement with Iran regarding the opening of the Strait of Hormuz would be reached soon—along with earnings surprises from AI-related companies such as Palantir.
In particular, expectations that prolonged memory price hikes and supply shortages caused by the continuous growth of the AI industry would persist drove sharp gains in Micron (+7.62%) and SanDisk (+10.84%), which appeared to revive investment sentiment toward the Korean stock market.
Meanwhile, SK Hynix American Depositary Receipts (ADRs) closed up 8.17% at $154.38.
Given that one ADR corresponds to one-tenth of a Korean common share, this price is nearly 40% higher than SK Hynix's closing price the previous day (1.577 million won, or approximately $1,106).
However, securities analysts diagnose that it is unlikely for the time being that large-cap semiconductor stocks alone will skyrocket sharply as they did before.
This means that rather than market liquidity being unilaterally concentrated on semiconductors, it will be distributed to other sectors that have been neglected so far, leading to a relatively balanced recovery.
Huh Jae-hwan, an analyst at Eugene Investment & Securities, said, "While signs of spread are clear in global stock markets, the Kosdaq and small-to-mid-cap stocks are also rebounding in the domestic stock market this week," adding, "The number of advancing stocks is outpacing declining stocks, and the polarization phase is calming down."
He noted that while it might be disappointing that semiconductors—oversold stocks that should rebound strongly after a sharp drop—did not rise cleanly, "the spread suggests a much healthier, albeit slower, recovery."
In fact, the Kosdaq has risen for four consecutive trading days up to today, starting with an 11.63% surge on the 31st of last month.
The gain over the four trading days reached 24%.
In particular, the upward momentum was so fierce that buy sidecars were triggered for three consecutive trading days for the first time ever from the 31st of last month through the previous day, with the index gain totaling 21.1% during this period.
Kim Seok-hwan, an analyst at Mirae Asset Securities, pointed out, "The Kosdaq index rising by more than 20% over three trading days is the third time since its launch in 1997, following the U.S. IT bubble in 2000 and the global financial crisis in 2008."
Noh Dong-gil, an analyst at Shinhan Securities, said, "We retraced 23.4% of the drop that occurred since April 27 in just three days. Given that the rebound appeared without a clear improvement in earnings forecasts, the cause should be sought in changes to price formation conditions rather than fundamentals."
He explained that the sharp rebound occurred as credit liquidation—which amplified the plunge—progressed rapidly, with Kosdaq credit margin balances dropping 47.2% to 5.83 trillion won as of the 3rd of this month compared to the peak on April 29 (11 trillion won), while background factors that inevitably led to Kosdaq's relative weakness, such as the weak won, eased alongside large-scale institutional buying.
Noh advised that at the initial stage when the market changes direction, price transmission of commodity supply and demand is stronger than differences in earnings by sector, and suggested responding to the rebound through the Kosdaq 150 index for now.
He added that once net inflows into leveraged exchange-traded funds (ETFs) and net buying by financial investment pass their peaks, sector-specific responses can be considered, noting, "Semiconductors and IT hardware, where growth rates and earnings upgrades are confirmed together, can be favored, alongside healthcare stocks with earnings visibility and robotics as a theme where commodity supply inflows can be anticipated."
The Kosdaq index briefly recovered the 800 level during the session before closing up 18.87 points (2.42%) at 799.59 compared to the previous session.
As the domestic stock market shows a sharp recovery, attention is also focused on whether concerns from some quarters that small-cap stocks could face mass delisting risks due to falling short of market capitalization criteria will be somewhat alleviated.
The Korea Exchange and financial authorities raised the market capitalization threshold for maintaining listings to 30 billion won for the KOSPI and 20 billion won for the Kosdaq starting last month.
They also established delisting requirements for "penny stocks" with share prices below 1,000 won.
Failing to meet these criteria for 30 consecutive trading days results in designation as an administrative issue.
If the criteria are not exceeded for 45 days out of the subsequent 90 trading days, the stock may be delisted.
However, as a global semiconductor correction began in late June and the Kosdaq plunged in tandem, listed companies falling short of the criteria flooded in during last month.
According to the Korea Exchange, as of the market close today, Kosdaq-listed stocks falling below the 20 billion won market capitalization mark stood at 192, down nearly 20% from 239 before the rebound started on the 30th of last month.
The number of KOSPI-listed stocks below the 30 billion won market capitalization mark also decreased by 11, from 107 to 96 over the same period.
(Photo: Yonhap News)
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