Samsung, SK Hynix Lead Rally as Foreign Investors Return to South Korean Market
Following a conditional two-week ceasefire agreement between the US and Iran, foreign investors significantly shifted their strategy on the South Korean benchmark Kospi. Ending a prolonged selling spree, they became net buyers during Wednesday’s trading session, fueling a notable market rally.
The main board Kospi demonstrated robust performance, opening at 5,804.7 with a 5.64 percent increase from the prior session. By 2 p.m., it had extended its impressive gains, climbing 7.61 percent to reach 5,912.8. Similarly, the secondary Kosdaq market experienced a positive opening at 1,084.57, up 4.61 percent, and maintained its strength at 1,083.93, reflecting a 4.55 percent gain.
This surge in market enthusiasm and sharp buying demand led to the activation of buy-side sidecars on both major exchanges. The main bourse experienced a sidecar trigger at 9:06 a.m., followed by the Kosdaq at 9:13 a.m., temporarily halting programmed buy orders for a five-minute period to manage volatility.
By 2 p.m., foreign investors had executed significant net purchases exceeding 2 trillion won ($1.36 billion) on the Kospi. This powerful buying trend was reinforced by institutional investors, who recorded net buying of 2.72 trillion won, collectively propelling the market upwards. Conversely, retail investors opted to capitalize on the rally, recording net sales of over 4.95 trillion won, effectively taking profits.
These offshore investors, who previously demonstrated record net selling – 35.88 trillion won on the main board in March and 21.07 trillion won in February – are now exhibiting clear signs of a gradual return to the South Korean market. Their renewed confidence is evidenced by net purchases totaling 270 billion won so far this month through Tuesday.
Their positive sentiment commenced on Friday, when they effectively broke an 11-day streak of net selling by recording substantial net purchases of 804 billion won. Although they briefly became net sellers in the subsequent session, offloading 160 billion won, foreign investors quickly reverted to net buying on Tuesday, acquiring 370 billion won worth of shares.
Leading market heavyweights experienced significant gains. Samsung Electronics saw its shares surge by 9.03 percent, while SK Hynix recorded an even more impressive 14.08 percent rise. Hyundai Motor also performed strongly, jumping 7.72 percent. In contrast, LG Energy Solution was an outlier, shedding 1.1 percent.
Concurrently, the South Korean won demonstrated a notable strengthening against the US dollar. This appreciation was fueled by improved global risk sentiment and a concurrent drop in international oil prices. At the onset of onshore trading, the won was valued at 1,479.9 per dollar, and by 2 p.m., it had further extended its gains to 1,473.08 per dollar.
This marked a significant milestone for the currency. It was the first time the won opened below the crucial 1,500-per-dollar threshold since March 25, when it began trading at 1,493. Furthermore, this represented the first instance in approximately a month that the won strengthened beyond the 1,480 level during intraday trading.
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