Kospi surges past 6,570 on semiconductor rally, buy-side sidecar triggered

The Kospi surged more than 3 percent Wednesday to reclaim the 6,570 level, driven by a broad rally in semiconductor stocks led by Samsung Electronics and SK hynix. Foreign and institutional investors combined for more than 3 trillion won ($2.12 billion) in net purchases, lifting the index, while a buy-side sidecar — a temporary halt on program-trading buy orders — was triggered during the session. The gains came as large AI infrastructure orders from US companies and news of Singapore's state investment firm Temasek taking new positions in domestic chipmakers boosted investor sentiment.

According to Korea Exchange, the Kospi closed at 6,579.04, up 233.51 points, or 3.68 percent, from the previous session — its third consecutive day of gains. The index opened up 92.97 points, or 1.47 percent, at 6,438.50 and extended its advance throughout the day.

Strong buying pressure triggered a buy-side sidecar during the session. Korea Exchange activated a temporary suspension of program-trading buy orders on the Kospi market at 11:57 a.m., after the mini KOSPI 200 futures contract rose 5.13 percent from its reference price of 987.08 to 1,037.76 and held that level for one minute. Program trading recorded net purchases of 590.2 billion won at the time of activation. Wednesday's sidecar was the 47th of the year — 24 sell-side and 23 buy-side activations.

On the Kospi market, foreign investors and institutions net-bought 2.84 trillion won and 527.7 billion won, respectively, driving the index higher. Retail investors, by contrast, were net sellers of 3.19 trillion won.

Semiconductors led the day's rally. Samsung Electronics closed at 255,500 won, up 16,000 won, or 6.68 percent, reclaiming the 250,000-won level. SK hynix rose 79,000 won, or 5.54 percent, to close at 1.5 million won, crossing back above the 1.5 million-won mark.

Strong earnings and order figures from US AI infrastructure companies stoked appetite for semiconductor stocks. CoreWeave posted second-quarter sales of $2.58 billion, up 112 percent from a year earlier. Its order backlog grew to $104 billion on the back of contracts with Anthropic, Meta and others, and the company raised its annual capital expenditure plan to between $35 billion and $39 billion. Super Micro Computer also said on a conference call that new orders this quarter exceeded $60 billion, and it set its fiscal year 2027 sales outlook at between $65 billion and $72 billion.

Reports that Singapore's sovereign wealth fund Temasek had decided to make new investments in Samsung Electronics and SK hynix added further momentum to semiconductor stocks. News that Temasek viewed memory chips as a relatively undervalued segment of the AI value chain and planned to invest directly in both companies fueled additional gains in the two stocks during the session.

Most large-cap stocks also advanced. SK Square rose 8.36 percent, Samsung Electro-Mechanics 5.78 percent, LG Energy Solution 1.13 percent, Hyundai Motor 1.61 percent, Samsung Life Insurance 4.49 percent and Hanwha Aerospace 5.28 percent. Samsung Biologics was the lone decliner among top-cap names, falling 3.73 percent.

The Kosdaq closed at 858.91, up 1.07 points, or 0.12 percent, from the previous session. The index opened down 2.99 points, or 0.35 percent, at 854.85, fluctuated throughout the day and finished with a marginal gain.

On the Kosdaq market, retail investors net-bought 314.9 billion won, while institutions and foreign investors were net sellers of 147.7 billion won and 162.2 billion won, respectively. Ecopro rose 1.11 percent, Ecopro BM 4.19 percent, Rainbow Robotics 2.08 percent, Jusung Engineering 7.14 percent, Wonik IPS 6.49 percent and EO Technics 4.61 percent. Alteogen fell 3.05 percent, HLB 0.83 percent, Leeno Industrial 0.14 percent and ABL Bio 2.58 percent.

Market attention is now turning to the release of the US July consumer price index later Wednesday. Last week's July employment data confirmed a slowdown in the labor market, and if inflation also comes in line with expectations — suggesting limited upward price pressure — wariness over US monetary policy is expected to ease. West Texas Intermediate crude has been trading above $80 a barrel amid uncertainty over US-Iran negotiations, but US government bond yields showed limited movement ahead of the CPI release.

With the rise in US government bond yields contained and dollar strength losing momentum, the won edged down against the dollar. The won-dollar exchange rate in the Seoul foreign exchange market fell 0.2 won from the previous session to 1,415.7 won.

"Large order backlogs and new orders reaffirmed that AI infrastructure investment and semiconductor demand remain solid, which stimulated investor sentiment," said Lee Gyeong-min, an analyst at Daishin Securities. "Not only large-cap semiconductor stocks but also Kosdaq semiconductor materials, components and equipment names rose in tandem, contributing to the index's gains."