Kosdaq surges 4% as buying sidecar triggers; Kospi tops 6,300

The Kospi opened higher Monday, reclaiming the 6,300 level, while the Kosdaq surged more than 4%, triggering a buying sidecar — a temporary suspension of program buy orders — early in the session.

According to Korea Exchange, the Kospi stood at 6,325.21 as of 9:37 a.m., up 66.44 points, or 1.06 percent, from the previous session. The index opened at 6,306.33, up 47.56 points, or 0.76 percent, and has been trading in a narrow range since.

On the Kospi market, institutions and retail investors posted net purchases of 236.1 billion won ($166 million) and 3.5 billion won, respectively. Foreign investors were net sellers of 256.1 billion won.

All three major US indexes rose at the end of last week, with the Philadelphia Semiconductor Index also advancing, easing concerns about a peak in the semiconductor cycle.

On Friday, the Dow Jones Industrial Average gained 0.28 percent and the S&P 500 rose 0.62 percent. The NASDAQ Composite also climbed 1.30 percent.

"Easing concerns about an interest rate hike this month, along with rising Nvidia earnings and semiconductor prices, should calm worries about the semiconductor industry's business conditions and earnings, and set the stage for a normalization of Kospi share prices and valuations," said Lee Gyeong-min, an analyst at Daishin Securities.

Among large-cap stocks, Samsung Electronics was trading up 0.87 percent at 233,000 won, while SK Hynix rose 1.83 percent to 1.448 million won.

Hanwha Aerospace (up 5.20 percent), Samsung Electro-Mechanics (up 2.11 percent) and Hyundai Motor (up 0.88 percent) were also higher. KB Financial Group (down 3.19 percent), Samsung Biologics (down 1.03 percent) and LG Energy Solution (down 0.69 percent) were among the decliners.

At the same time, the Kosdaq was up 36.72 points, or 4.60 percent, at 835.53. The index opened at 807.66, up 8.85 points, or 1.11 percent, and has extended its gains since.

The Kosdaq's early surge of more than 4 percent triggered a buying sidecar. The mechanism has now been activated three times in six trading days this month — on July 31 and again on Aug. 3 and Aug. 4.

The Kosdaq sidecar is triggered when the Kosdaq 150 futures price rises 6 percent or more from its reference price and the Kosdaq 150 index simultaneously gains 3 percent or more from the previous session's closing level, with both conditions sustained for one minute.

Foreign investors and institutions were net buyers of 123 billion won and 85.1 billion won, respectively, on the Kosdaq market, driving the index higher. Retail investors were net sellers of 206.9 billion won.

Top Kosdaq stocks by market capitalization were broadly higher, led by Alteogen (up 12.62 percent), Jusung Engineering (up 9.47 percent), ABL Bio (up 5.43 percent) and HLB (up 4.83 percent).