Institutions, other corporations post heavy net purchases; foreign investors sell for 4th straight session

Samsung C&T, Samsung Life, Samsung Fire surge on shareholder-return hopes

Dealers work at the trading room of Hana Bank's headquarters in Seoul on Wednesday. [Yonhap]
Dealers work at the trading room of Hana Bank's headquarters in Seoul on Wednesday. [Yonhap]

The Kospi recovered the 6,800 level on Wednesday, driven by buying in large-cap semiconductor stocks and Samsung Group shares, even as caution lingered ahead of Nvidia's earnings release the following day.

Foreign investors and retail traders both posted net selling, but heavy net purchases by institutions and other corporations — the latter largely attributed to share buybacks by Samsung Electronics and SK hynix — lifted the index, extending the pattern of early weakness followed by a late-session recovery seen on Tuesday.

The Kospi closed at 6,808.21, up 65.47 points, or 0.97 percent, from Tuesday, according to Korea Exchange. The index opened down 15.49 points, or 0.23 percent, at 6,727.25 before reversing course.

The benchmark fluctuated for much of the morning amid wariness over Nvidia's upcoming results, then began to extend gains from around 11 a.m. as large-cap semiconductor stocks led the advance. The Kospi briefly touched 6,887.18, a gain of 2.14 percent, before giving back some of those gains by the close.

Foreign investors extended their net selling on the main board to four consecutive sessions. They briefly turned net buyers during the session but ended the day with net selling of 105.1 billion won ($76 million). Retail investors also swung back to selling after three sessions on the buy side, posting net sales of 2.25 trillion won. Institutions provided support with net purchases of 764.8 billion won, while other corporations added 1.6 trillion won in net purchases.

Other corporations have recently emerged as a major force in the market, recording net purchases in the trillion-won range, driven by Samsung Electronics' buyback of treasury shares for employee stock compensation and SK hynix's repurchase of shares for cancellation.

The two domestic semiconductor giants swung between gains and losses during the session but ultimately closed higher. Samsung Electronics ended up 1.75 percent from Tuesday at 261,500 won per share. The stock opened slightly lower before reversing and briefly reaching 266,500 won, a gain of 3.70 percent.

As expectations grew for a record-scale shareholder return program from Samsung Electronics, shares of affiliates holding stakes in the company also rallied — Samsung C&T rose 5.59 percent, Samsung Life gained 8.60 percent and Samsung Fire advanced 4.94 percent.

SK hynix closed up 0.60 percent at 1.69 million won per share. It too opened down 0.60 percent before reversing direction and briefly surging to 1.74 million won, a gain of 3.40 percent.

Among other large-cap stocks, LG Energy Solution rose 0.43 percent, KB Financial Group gained 0.12 percent and Doosan Enerbility climbed 6.32 percent. SK Square edged down 0.19 percent, Samsung Electro-Mechanics fell 2.35 percent and Hyundai Motor dropped 3.09 percent.

Korea Electric Power Corporation surged 6.42 percent after reports that the US government had proposed to South Korea a joint acquisition of a stake in nuclear power company Westinghouse Electric.

SK Innovation tumbled 11.04 percent after news broke that it would absorb its separator-unit subsidiary SK ie technology through a merger, with investors focusing on SK ie technology's weak earnings and concerns over the financial burden the deal would bring.

The Kosdaq closed at 826.87, down 0.28 points, or 0.03 percent. The index opened at 824.77, down 2.38 points, or 0.29 percent, and drifted before settling in slightly negative territory. On the Kosdaq, foreign investors and institutions posted net selling of 91.1 billion won and 105.1 billion won, respectively, while retail investors recorded net purchases of 192.8 billion won.

Ecopro BM fell 0.89 percent, Rainbow Robotics dropped 0.88 percent and Jusung Engineering declined 3.02 percent, while Alteogen rose 1.96 percent, Ecopro gained 2.11 percent and PharmaResearch advanced 6.63 percent.

The won strengthened slightly against the dollar. As of 3:30 p.m. in the Seoul foreign exchange market, the won-dollar rate stood at 1,384.8 won, down 1.3 won from Tuesday's benchmark rate.


th5@heraldcorp.com