Kospi reclaims 7,100 as semiconductor rally revives 'W2m hynix'

The Kospi reclaimed the 7,000 level during Wednesday's session as investor sentiment recovered on the back of an overnight surge in US semiconductor stocks. Samsung Electronics rose more than 5% and SK hynix briefly recovered the 2 million won ($1,350) mark intraday, while a buy-side sidecar was triggered on the main bourse.

According to Korea Exchange, the Kospi was trading at 7,148.02 as of 9:15 a.m. Wednesday, up 400.07 points, or 5.93%, from the previous session. The index opened 304.14 points, or 4.51%, higher at 7,052.09 before extending its gains.

Korea Exchange activated a buy-side sidecar on the main market at 9:06 a.m. after KOSPI 200 futures rose more than 5% above their base price for at least one minute. Program buy orders were suspended for five minutes as a result. It was the 40th sidecar activation of the year, with buy-side and sell-side triggers each accounting for 20 of those instances.

Foreign investors were net buyers of 956.1 billion won on the main market. Institutions and retail investors were net sellers of 325.5 billion won and 628.7 billion won, respectively.

Overnight on Wall Street, semiconductor stocks rebounded across the board, lifting investor sentiment. The Philadelphia Semiconductor Index surged 5.21%, Micron jumped 12.17%, and SK hynix's American depositary receipts climbed 13.75%. The moves were attributed to bargain buying concentrated in chip stocks that had suffered steep recent losses.

Riding that momentum, Samsung Electronics was trading up 15,000 won, or 5.79%, at 274,000 won, while SK hynix gained 163,000 won, or 8.88%, to 1,999,000 won.

Among large-cap stocks, SK Square (up 8.38%), Samsung Electro-Mechanics (12.06%), Hyundai Motor (7.89%), LG Energy Solution (4.57%), Samsung Life Insurance (7.12%), Samsung Biologics (2.08%) and KB Financial Group (2.01%) were all advancing.

The Kosdaq was up 33.43 points, or 4.44%, at 786.77 at the same time, after opening 19.07 points, or 2.53%, higher at 772.41.

On the Kosdaq, foreign investors and retail investors were net buyers of 4.7 billion won and 12.8 billion won, respectively, while institutions were net sellers of 17.2 billion won.

Among Kosdaq large caps, Alteogen (up 3.66%), Ecopro BM (5.00%), Ecopro (6.65%), Rainbow Robotics (24.18%), Jusung Engineering (6.68%), Wonik IPS (8.96%), Leeno Industrial (6.14%), EO Technics (5.67%) and Fadu (3.35%) were all posting strong gains. PSK was the lone decliner among the group, slipping 0.35%.

Han Ji-young, a researcher at Kiwoom Securities, said market attention would shift to Alphabet's earnings, due to be released in the early hours of Thursday. "Since the market correction since July was triggered by controversy over earnings related to semiconductors and AI, these results will be the first event to reassess the visibility of AI demand," Han said.

Han said the surge in US semiconductor stocks, strength in overnight KOSPI 200 futures and expectations for domestic companies' second-quarter earnings were all supporting the rally. He cautioned, however, that intraday volatility could increase given the elevated VKOSPI volatility index and a sharp rise in single-stock leveraged trading. He added that given the market's valuation appeal at a forward price-to-earnings ratio of around 5.7 times and improving foreign investor flows, a strategy of holding or gradually accumulating semiconductor-focused positions remained sound.