Index snaps 8-session losing streak on foreign net buying

US Treasury yields ease, but rebound limited relative to prior losses

Share price indexes and exchange rates are displayed at the dealing room of Hana Bank's headquarters in Jung-gu, Seoul, on Friday. The Kospi closed up 113.83 points, or 2.05 percent, at 5,668.05, rebounding from Thursday's sharp losses. [Yonhap]
Share price indexes and exchange rates are displayed at the dealing room of Hana Bank's headquarters in Jung-gu, Seoul, on Friday. The Kospi closed up 113.83 points, or 2.05 percent, at 5,668.05, rebounding from Thursday's sharp losses. [Yonhap]

The Kospi, which had been in freefall in recent sessions, rebounded Friday for the first time in eight trading days as foreign investors returned to the market.

According to Korea Exchange, the benchmark index closed up 113.83 points, or 2.05 percent, at 5,668.05 on Friday.

The index opened 99.77 points, or 1.80 percent, higher at 5,653.99 and at one point surged as high as 5,809.94, a gain of 4.60 percent.

Foreign investors posted net purchases of 343 billion won ($254 million) on the main Kospi market by the close of the regular session, snapping eight consecutive trading days of net selling.

Retail and institutional investors were net sellers, however, offloading 484.7 billion won and 683.4 billion won worth of shares, respectively.

Overnight on Wall Street, all three major indexes closed higher as US Treasury yields calmed.

The Dow Jones Industrial Average rose 1.08 percent, while the S&P 500 and NASDAQ Composite gained 0.33 percent and 0.08 percent, respectively.

Many AI and semiconductor-related stocks declined, however, with the Philadelphia Semiconductor Index falling 0.88 percent.

CoreWeave, a neo-cloud provider whose struggles had sparked concerns about AI infrastructure investment, closed up 5.9 percent.

The gain came after Nvidia CEO Jensen Huang said at a Bloomberg event that CoreWeave's competitiveness was strengthening day by day.

Seo Sang-young, a managing director at Mirae Asset Securities, said Huang's remarks helped ease concerns about AI credit risk and served as a key catalyst for the market's recovery.

US Treasury yields fell sharply, led by longer-dated maturities. The 10-year yield dropped 12 basis points to 5.05 percent, while the 30-year yield fell more than 11 basis points to 5.40 percent. One basis point equals 0.01 percentage point.

Domestic stocks opened higher Friday but trimmed gains as lingering doubts about AI investment kept a lid on the advance.

The pullback was seen as drawing bargain hunters after Thursday's steep declines — the Kospi fell 7.57 percent and the Kosdaq dropped 7.65 percent, steep enough to trigger circuit breakers in both markets for the first time in about two and a half months.

The rebound was modest relative to the scale of prior losses, however. The Kospi had fallen for seven consecutive sessions from Oct. 6 through Thursday, shedding 1,449.52 points, or 21 percent, over that stretch.

Analysts say a sustained recovery will require the dissipation of anxiety over AI profitability.

Hwang San-hae, a researcher at LS Securities, said the accumulated supply-demand vacuum — created by sustained foreign selling and the end of share buyback programs at the two major semiconductor companies — had amplified the price impact of negative news. "Retail and institutional investors have also proven insufficient as buyers to drive a sustained trend, and confidence in buying has retreated as rebound attempts driven by oversold perceptions during the week failed to hold," he said.

He added that the key to returning to a long-term uptrend lies not in expanded investment by big tech firms, but in productivity gains and spending capacity at companies adopting AI, and the resulting recovery in cash flows at hyperscalers.

The two semiconductor heavyweights extended their intraday gains to as much as 4 to 5 percent at points during the session but ultimately closed only marginally higher.

Samsung Electronics ended up 2.62 percent at 215,500 won, while SK hynix rose 0.79 percent to close at 1,272,000 won.

Among other large-cap stocks, SK Square gained 2.48 percent, LG Energy Solution edged up 0.12 percent, Samsung Electro-Mechanics rose 2.15 percent, Hyundai Motor surged 5.58 percent and Samsung Biologics climbed 4.09 percent. Shinhan Financial Group fell 0.85 percent, Samsung SDI dropped 1.85 percent and HD Hyundai Heavy Industries slipped 0.28 percent.

The Kosdaq surged 33.96 points, or 4.46 percent, to close at 794.78.

The index opened up 11.35 points, or 1.49 percent, at 772.17 and briefly reclaimed the 800 level, touching 807.54 for a gain of 6.14 percent. The sharp rally triggered a buy-side sidecar on the Kosdaq market at around 12:55 p.m.

Institutional investors were the driving force on the Kosdaq, posting net purchases of 168.4 billion won. Retail and foreign investors were net sellers, offloading 91.5 billion won and 90.3 billion won worth of shares, respectively.

Many of the Kosdaq's top market-capitalization stocks closed higher, including Alteogen, up 9.60 percent; Ecopro, up 0.62 percent; Ecopro BM, up 0.94 percent; Jusung Engineering, up 2.93 percent; and Rainbow Robotics, up 2.03 percent.

Lee Kyung-min, a researcher at Daishin Securities, said that while South Korea's export data for Oct. 1-20 and other indicators are due next week, macroeconomic events are unlikely to be enough on their own to reverse investor sentiment still clouded by AI doubts. "The key question is whether earnings releases from Meta, Lam Research, IBM, TI and Western Digital — all due Wednesday — can ease concerns about the sustainability of AI investment and the outlook for the semiconductor industry," he said.


jiyun@heraldcorp.com