KB News Desk
Index jumps over 8% as easing US inflation boosts risk appetite and foreign investors pour into chip stocks
Seoul stocks reclaimed the 7,000 mark on Wednesday, with the Kospi surging more than 8 percent at one point as foreign investors stepped up buying amid a rebound in risk appetite.
As of 2:30 p.m., the Kospi was trading around 7,280, up 6.2 percent from the previous close. The index opened 3.3 percent higher at 7,082.9 before climbing as much as 8.2 percent to an intraday high of 7,424.18.
The early surge triggered a buy-side sidecar, halting program trading for five minutes. Kospi 200 futures were up 6.5 percent when the curb was activated.
Foreign investors led the rally, buying a net 2.4 trillion won ($1.61 billion) worth of shares as of 2:30 p.m., more than double their purchases of nearly 1 trillion won the previous day. Institutions added a net 180 billion won, though their buying slowed from Tuesday.
Retail investors were the sole net sellers, offloading nearly 2.5 trillion won worth of Kospi shares.
Chip heavyweights led the gains, with Samsung Electronics rising 5.9 percent to 278,500 won and SK hynix jumping 10 percent to 2.1 million won. SK Square, SK hynix’s largest shareholder and the Kospi’s third-largest company by market capitalization, surged as much as 17.5 percent during the session.
The rally extended across other large-cap stocks, with Hyundai Motor gaining 2 percent, LG Energy Solution 3 percent, Samsung Life 6.5 percent and Hanwha Aerospace 8.5 percent.
The local market followed Wall Street higher after signs of easing US inflation lifted risk appetite overnight, with semiconductor stocks leading the advance. The tech-heavy Nasdaq Composite climbed 0.9 percent, while the Dow Jones Industrial Average edged up 0.02 percent and the S&P 500 gained 0.38 percent.
Major chip stocks also rallied, with Nvidia up 4.06 percent, Micron 4.92 percent, Intel 4.5 percent and AMD 2.57 percent. The Philadelphia Semiconductor Index closed 2.54 percent higher, while SK hynix’s US-listed ADRs surged 27 percent to $193.92.
US consumer prices rose 3.5 percent from a year earlier in June, below the 3.8 percent forecast, and fell 0.4 percent from the previous month, easing concerns over further rate increases.
“Risk appetite has recovered following the release of the US June CPI, while foreign and institutional investors have driven the index higher with net buying for a second straight session,” said Kang Jin-hyuk, a senior researcher at Shinhan Securities. “More than 90 percent of listed stocks were up at one point, showing the rebound had spread across the broader market.”
Kang added that earnings from ASML and TSMC this week will be key to determining whether the rebound in chip stocks can be sustained.
The Kosdaq also gained 4.4 percent to trade around 818 in the afternoon, reclaiming the 800 level.
Foreign inflows also supported the won, which opened daytime trading at 1,487 per dollar and stayed below the 1,500 mark after breaching that level a day earlier for the first time in nearly two months.
