Kospi breaks 6,800 on US inflation relief, semiconductor surge

The Kospi broke above the 6,800 level in early trading Thursday, driven by easing US inflation concerns and a rally in semiconductor stocks. July consumer price index data from the United States came in line with market expectations, reducing anxiety over monetary policy, while overnight gains in Micron, Nvidia and other chip stocks on Wall Street added to the momentum. Expectations for large-scale shareholder returns from Samsung Electronics and SK hynix further fueled buying by foreign and institutional investors, particularly in large-cap shares.

According to Korea Exchange, the Kospi was trading up 250.15 points, or 3.80%, at 6,829.19 as of 9:27 a.m. Thursday. The index opened 194.88 points, or 2.96%, higher at 6,773.92 before surging as much as 4.81% to an intraday high of 6,895.63.

On the main Kospi market, foreign investors and institutions were net buyers of 566.5 billion won ($400 million) and 417.2 billion won, respectively. Retail investors were net sellers of 977.6 billion won.

US markets closed mixed overnight, though semiconductor and AI-related stocks outperformed. The Dow Jones Industrial Average slipped 0.04%, while the S&P 500 and the Nasdaq Composite rose 0.26% and 0.54%, respectively. Micron climbed 4.92% and Nvidia gained 3.03%, while AI infrastructure company CoreWeave surged 19.28%.

The on-target US July CPI reading also bolstered investor sentiment. The headline CPI rose 3.4% year on year in July, slowing from 3.5% in June, while core CPI eased to 2.5% from 2.6% the previous month. On a monthly basis, both the headline and core CPI rose 0.1% and 0.2%, respectively, matching market forecasts. In response, the probability of the Federal Reserve holding its benchmark interest rate steady in September rose to around 59% in interest rate futures markets from roughly 52% before the data release.

Samsung Electronics and SK hynix are leading the domestic market rally. Samsung Electronics was trading up 11,500 won, or 4.50%, at 266,750 won, while SK hynix gained 109,000 won, or 7.25%, to 1.62 million won.

Alongside earnings improvement driven by a semiconductor supercycle, expectations for expanded shareholder returns at both companies are also lifting their share prices. Samsung Electronics is expected to unveil its next three-year shareholder return policy — potentially including a special dividend — as early as this month, while SK hynix plans to announce additional shareholder return measures in the third quarter. Some analysts forecast the combined annual shareholder return from the two companies could reach as much as 300 trillion won.

Among other large-cap stocks, SK Square rose 7.71%, Samsung Electro-Mechanics 11.54%, Hyundai Motor 3.42%, LG Energy Solution 1.95%, Samsung Biologics 0.13%, Samsung Life 2.64% and Hanwha Aerospace 1.82%. All 16 of the top stocks by market capitalization were trading higher.

The Kosdaq was posting more modest gains. At the same time, the index was up 1.78 points, or 0.21%, at 860.69. It opened 4.25 points, or 0.49%, higher at 863.15 and has since fluctuated during the session.

On the Kosdaq market, retail investors were net buyers of 171.6 billion won, while foreign and institutional investors were net sellers of 96.1 billion won and 68.1 billion won, respectively. Among top Kosdaq stocks by market capitalization, Alteogen fell 0.31%, Ecopro BM dropped 0.09%, HLB declined 0.84% and ABL Bio slipped 1.27%. On the upside, Ecopro gained 0.11%, Rainbow Robotics rose 1.43%, Jusung Engineering advanced 0.86%, Wonik IPS climbed 4.04% and EO Technics added 4.54%.

Han Ji-young, a researcher at Kiwoom Securities, said the July CPI data was "at minimum a neutral-to-positive catalyst for the market, as it further reduced the risk of a Fed rate hike in September." He added that earnings from AI infrastructure companies such as CoreWeave and Super Micro Computer confirmed that "AI demand is spreading beyond simple GPUs to encompass the broader core value chain — cloud, power and servers."

Han also said the combination of easing rate-hike concerns following the in-line US July CPI print and the sharp rally in US semiconductor stocks such as Micron "will spread positive sentiment not only to domestic chip stocks but to other sectors as well," adding that "the recent easing of foreign net selling pressure compared to before is also worth watching."