(LEAD) Stocks end higher on chip gains amid hopes for shareholder return plans

Seoul stocks finished higher on Friday, buoyed by the optimism surrounding large-scale shareholder return schemes from two leading chipmakers - Samsung Electronics and SK hynix. The Korean won strengthened against the US dollar. The KOSPI index closed 60.37 points, or 0.88 percent, higher at 6,912.95, having peaked at 6,954.12 earlier in the day.

Trading activity was moderate with 404.5 million shares trading hands, totaling 28.7 trillion won (US$20.7 billion). Out of the 874 stocks listed, losers far outweighed winners, with 681 stocks falling compared to 193 that gained. Retail and foreign investors were the net sellers, offloading a combined 1.34 trillion won, while institutional investors made up for the loss by purchasing 248.2 billion won worth of shares.

The boost in local stocks was primarily driven by the shareholder return plans announced by SK hynix and Samsung Electronics, which managed to overshadow other external uncertainties. Daishin Securities analyst Lee Kyoung-min noted that these plans had played a significant role in buoying the local market. Samsung Electronics, which is expected to unveil its shareholder return scheme worth up to 110 trillion won later in the day, saw its shares rise by 3.87 percent to 281,500 won.

SK hynix, on the other hand, announced a plan to repurchase shares valued at 40 trillion won, contributing to a 2.31 percent increase in its stock price to 1,730,000 won.

However, further gains were restrained due to external uncertainties, including the surprise bond buyback by the U.S. Treasury Department, which failed to alleviate concerns about inflation and government debt. This led to a rise in bond yields. Among the market bellwethers, Samsung Electronics gained 3.87 percent to close at 281,500 won, while SK hynix added 2.31 percent to reach 1,730,000 won.

Financial shares also performed well as investors took advantage of the opportunity, with KB Financial increasing 2.69 percent to 164,300 won, and Shinhan Financial Holdings rising 2.97 percent to 104,100 won. Defense and shipbuilding sectors, however, faced profit-taking pressure. Hanwha Aerospace, a defense giant, saw its shares decline by 7.03 percent to 1,085,000 won, while HD Hyundai Heavy Industries, a shipbuilder, dropped 4.73 percent to 453,000 won.

Shares of Kakao also dropped sharply by 7.49 percent to 35,800 won following the announcement of a spinoff of its chat-app based platform business.