[Opening Market] KOSPI Rebounds on SK hynix's Buyback Shock
As of 9:50 a.m. on Aug. 20, the domestic stock market is successfully staging a strong technical rebound, recovering from the severe plunge of the previous day. This is interpreted as the result of a rapid recovery in investor sentiment, driven by the calming of the surge in global long-term interes
The Korean stock market, measured by the KOSPI index, experienced a significant rebound on August 20, 2023, following a sharp decline the previous day. This resurgence in investor confidence was attributed to a combination of factors. Firstly, the U.S. Treasury Department announced an expanded treasury bond buyback program, leading to a calming of global long-term interest rates.
Secondly, SK hynix, a leading domestic semiconductor stock, disclosed an unprecedented shareholder return policy, which included the purchase and cancellation of treasury stocks worth 40 trillion won. The KOSPI index opened at 6,680.34, a 3.23% increase from the previous trading day, and reached a high of around 6,720 points by mid-morning as buying continued in early trading.
The index had previously fallen below the 6,400 mark. The KOSDAQ index also showed a positive trend, opening at 843.99, a 2.37% increase from the previous day, and remaining steady around the 840 mark. Foreign and institutional investors, who had driven a previous massive sell-off, turned into net buyers in the early trading session, buoyed by the stabilization of U.S. Treasury yields and a declining exchange rate.
Foreign investors exhibited a significant buying trend, particularly in the electric and electronic sectors, while institutional investors participated in a joint buying trend centered around financial investments and investment trusts. Individual investors, on the other hand, showed a selling advantage as the index rebounded, leading to the release of items for profit-taking and risk management.
The semiconductor sector led this rally, with SK hynix being the primary driver, surging over 8% in early trading after announcing the shareholder return plan. Other major large-cap stocks such as Samsung Electronics, LG Energy Solution, Hyundai Motor, and Samsung Biologics also experienced a synchronized upward trend. The won/dollar exchange rate, which had weakened due to expectations of an end to the U.S. Federal Reserve's interest rate hikes, further facilitated the inflow of foreign funds, contributing to the positive trend in the stock market.
Written by urgent.news from BusinessKorea's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
