Nasdaq up 1.69%, Philadelphia Semiconductor Index up 3.14%; Micron surges 5.50%

US 10-year yield falls below 5%; Kospi night futures rise 2.99%

Foreigners net sell for 7th straight session; BOJ meeting adds uncertainty

An employee works at the dealing room of Hana Bank in Jung-gu, Seoul, on Thursday. The Kospi ended the session slightly lower at 6,715.41 after swinging between gains and losses during the day. [Yonhap]
An employee works at the dealing room of Hana Bank in Jung-gu, Seoul, on Thursday. The Kospi ended the session slightly lower at 6,715.41 after swinging between gains and losses during the day. [Yonhap]

Wall Street rebounded Thursday as investors digested the Federal Reserve's latest benchmark interest rate hike, and attention is now turning to whether the Kospi can ride that tailwind to a recovery on Friday. US 10-year Treasury yields fell back below 5 percent, semiconductor stocks including Micron surged, and Kospi night futures climbed nearly 3 percent. However, a Bank of Japan monetary policy meeting scheduled for Friday is seen as a potential wildcard.

The Kospi closed Thursday at 6,715.41, down 2.56 points, or 0.04 percent, from the previous session. Foreign investors net sold 2.28 trillion won ($1.67 billion), extending their selling streak to seven consecutive trading sessions. Individual investors and institutions net bought 413.7 billion won and 158.6 billion won, respectively, while other corporations purchased 1.7 trillion won worth of shares.

Despite the Fed raising its benchmark interest rate by 25 basis points, the Kospi managed to hold near flat. A growing sense that some uncertainty surrounding the future path of monetary policy had been resolved after the rate decision, combined with a pullback in global oil prices, helped support the index.

US stocks rallied across the board Thursday (local time). The Dow Jones Industrial Average rose 0.61 percent, while the S&P 500 and the Nasdaq Composite gained 1.14 percent and 1.69 percent, respectively.

Semiconductor stocks, which had suffered steep losses recently on concerns about a slowdown in AI investment, staged a sharp recovery. Micron rose 5.50 percent and Nvidia gained 2.54 percent. Intel surged 7.67 percent, and SK hynix's American depositary receipts advanced 4.64 percent. The Philadelphia Semiconductor Index climbed 3.14 percent.

A sharp drop in US Treasury yields also bolstered investor sentiment. With the Bank of England holding its benchmark rate at 3.75 percent annually and some monetary policy uncertainty following the Fed's hike easing, US yields fell broadly. The 10-year Treasury yield, which had briefly topped 5 percent during Thursday's session, stood at 4.946 percent as of 3 p.m. that day, down 5.7 basis points (one basis point equals 0.01 percentage point). The policy-sensitive 2-year yield fell 3.8 basis points to 4.688 percent, while the 30-year yield dropped 5 basis points to 5.296 percent.

International oil prices also continued to decline as concerns about supply disruptions from Saudi Arabia eased somewhat. November-delivery Brent crude futures fell 0.95 percent to $104.82 per barrel, while October-delivery West Texas Intermediate futures dropped 0.51 percent to $101.91 per barrel.

Analysts say the stock market is gradually adapting to a high-rate environment. Han Ji-young, a researcher at Kiwoom Securities, said that while the 4.5 percent threshold on the US 10-year Treasury yield was once seen as a key alert level for equities, the market's tolerance has since risen to 4.8 percent and then 5.0 percent. Han said corporate earnings and valuation appeal have improved, giving the market greater resilience to sustain elevated rates, and argued that going forward, the pace of rate increases and shifts in the earnings outlook will matter more to equities than the absolute level of interest rates.

Korea-linked market indicators also showed strength. The MSCI Korea ETF rose 3.90 percent, and the MSCI Emerging Markets ETF gained 1.81 percent. Kospi night futures advanced 2.99 percent.

The BOJ's monetary policy meeting on Friday, however, remains a variable for the domestic market. Investors are on alert over the possibility that the BOJ could raise its benchmark rate by 25 basis points. Given that a rate hike is seen as largely priced in, market attention is focused less on the decision itself and more on the BOJ's forward guidance on the path of monetary policy.

The domestic market is expected to open higher, supported by stabilizing US Treasury yields and the rebound in semiconductor stocks. Particular attention will be paid to whether foreign investors, who have net sold for seven straight sessions on the Kospi, shift their stance.

"Recent foreign net selling reflects short-term risk management in response to macro uncertainties — the September FOMC meeting, rising long-term yields and Middle East tensions — rather than fundamental concerns such as downward revisions to Kospi earnings estimates, a memory chip peak-out or a moderation in AI spending," Han said. "With US 10-year yields stabilizing, US equities rebounding led by semiconductors and Kospi night futures strong, we expect the market to trend higher as it absorbs the BOJ meeting. Once macro anxiety passes its peak, we would lean toward the likelihood of foreign investors returning as net buyers."


hajun825@heraldcorp.com