Kospi rebounds 3% as SK hynix surges 8% ahead of Nasdaq ADR listing

The Kospi rebounded more than 3 percent in early trading Thursday, recovering the 7,500 line after three consecutive sessions of losses, as SK hynix surged more than 8 percent on the eve of its American depositary receipt listing on the Nasdaq.

As of 9:46 a.m., the Kospi stood at 7,514.98, up 3.70 percent from Wednesday. The index opened up 3.31 percent at 7,486.64 and extended its gains through the morning, touching an intraday high of 7,540.45.

Samsung Electronics and SK hynix — the two largest stocks by market cap, which had fallen 6 percent and 5 percent, respectively, on Wednesday — led the advance.

Samsung Electronics rose 3.96 percent to 288,500 won ($191) in the same period, after briefly touching 290,000 won in early trade.

SK hynix climbed 8.04 percent to 2.24 million won, having earlier reached 2.27 million won in the opening minutes.

The recovery appeared to follow a rebound in chipmakers on Wall Street overnight.

While the Dow Jones Industrial Average fell 1.09 percent and the S&P 500 slipped 0.28 percent, the tech-heavy Nasdaq Composite edged up 0.20 percent. The Philadelphia Semiconductor Index jumped 2.2 percent.

Analysts attributed the buying to a view that the recent semiconductor selloff had been excessive. Broadcom surged 4.8 percent after reports that it had expanded a semiconductor supply deal with Apple to $30 billion. Nvidia closed up 3.65 percent, and Micron Technology gained 1.11 percent.

Sentiment toward SK hynix received an additional boost from foreign media reports that its ADR book-building drew subscriptions more than seven times the offered shares — equivalent to roughly $171.5 billion in subscription proceeds.

Demand for the ADR offering drew heavily from global long-term investment funds, technology-focused funds, sovereign wealth funds and Asia-focused global investors.

SK Group Chairman Chey Tae-won is also set to attend the SK hynix ADR listing ceremony on the Nasdaq in New York on Friday (local time), alongside senior executives. At the event, Chey and the management team are expected to brief global investors directly on SK hynix's competitiveness and medium-to-long-term growth strategy.

Other large-cap stocks including SK Square, Samsung Electronics preferred shares, Samsung Electro-Mechanics and LG Energy Solution also traded higher.

The investor breakdown was mixed. Retail investors were net sellers of 868.2 billion won, while foreigners and institutions were net buyers of 317.5 billion won and 602.8 billion won, respectively, supporting the index.

Foreign investors, who had been net sellers for 13 consecutive sessions from June 19, turned net buyers of 343.7 billion won on Wednesday and continued buying Thursday. The market is watching whether the return of foreign buying will sustain the Kospi's recovery.

Retail investors, by contrast, had been dominant buyers in recent sessions but turned net sellers of 35.8 billion won on Wednesday and continued selling Thursday. Analysts said the sharp swings in the Kospi had heightened fear among retail investors, prompting them to take profits as prices rose in early trade.

The Kosdaq rose 3.23 percent from Wednesday to 810.33 at the same time.

Top Kosdaq stocks by market cap — including Alteogen, Ecopro BM, Ecopro, Rainbow Robotics and Jusung Engineering — all traded in positive territory.

On the Kosdaq, retail investors and foreigners were net sellers of 63.2 billion won and 18 billion won, respectively, while institutions were net buyers of 79.4 billion won.

Han Ji-young, a researcher at Kiwoom Securities, said the domestic market would likely recover the previous session's steep losses, as the rebound in US semiconductor stocks and strength in KOSPI 200 overnight futures created buying incentives amid a perception that the three-session consecutive plunge had been overdone — even as the suspension of the US-Iran truce weighed on sentiment.