(LEAD) Seoul stocks spike nearly 6 pct on chip rally, eased U.S. bond yield concerns

Seoul's stock market surged nearly 6 percent on Thursday, driven by optimism surrounding chipmakers Samsung Electronics and SK hynix, and a decrease in concerns over U.S. bond yields. The Korea Composite Stock Price Index (KOSPI) climbed 381.41 points, or 5.89 percent, to close at 6,852.58. The index had previously dropped around 6 percent on a tech sell-off but bounced back after SK hynix announced a 40 trillion-won share buyback plan.

Speculation also mounted over Samsung Electronics' upcoming announcement of its shareholder return policy. Program trading for KOSPI-listed shares was halted for five minutes as the Korea Exchange activated a buy-side sidecar measure due to the KOSPI 200 Futures Index surging 5 percent or more within a minute.

Earlier, major U.S. stock indices had ended the day higher as the yield on 30-year Treasury bonds fell to levels not seen since 2007, following the Treasury Department's announcement of a significant increase in longer-term government debt buybacks. The 30-year bond's yield dropped, as did the benchmark 10-year yield. Throughout the day, trade volume was steady at 301.74 million shares, valued at 28.07 trillion won (US$20.15 billion), with the number of advancing shares exceeding the number of declining ones by a margin of 518 to 338.

Foreign investors and institutions bought a combined net of 1.71 trillion won and 487.37 billion won, respectively, while local individual investors sold a net of 2.28 trillion won. Analyst Kim Ki-baek of Shinhan Securities attributed the market's return to buying to the eased concerns over rising U.S. Treasury yields, and the positive impact of SK hynix's shareholder return plan.

Samsung Electronics, a market bellwether, rose by 9.49 percent to 271,000 won, while its chipmaking rival SK hynix gained 12.73 percent to 1.69 million won. SK Square, the parent company of SK hynix, increased by 11.85 percent to 1.12 million won, and Samsung Electro-Mechanics, an electronics component subsidiary of Samsung Electronics, saw a 0.65 percent rise to 1.39 million won.

By 3:30 p.m., the Korean won was trading at 1,392.6 won per U.S. dollar, down 5.1 won from the previous trading session's close.