Kospi stages dramatic comeback after plunging 4%, shrugging off W4tr in foreign selling

The Kospi staged a dramatic reversal Tuesday, clawing back from a steep early decline of more than 4 percent that had threatened the 6,400 level, as heavy buying by retail investors and institutions offset nearly 4 trillion won ($2.9 billion) in foreign net selling. Samsung Electronics and SK hynix recovered their intraday losses, and a rotation into non-semiconductor sectors helped lift the index to a modest gain by the close.

According to Korea Exchange, the Kospi finished up 45.78 points, or 0.68 percent, at 6,742.74. The index opened down 161.03 points, or 2.40 percent, at 6,535.93 and at one point fell as low as 6,408.82, a drop of 4.30 percent, before paring losses through the afternoon session and ultimately turning positive.

Foreign investors posted net selling on the main board for a third consecutive session, offloading a net 3.82 trillion won by the close. Retail investors countered with net purchases of 1.05 trillion won, following their buying on Monday, while institutions added 1.17 trillion won in net purchases, providing crucial support for the index.

Among institutional categories, other corporations recorded net purchases of 1.59 trillion won — the second-largest single-session figure on record for that category. Market analysts attributed the flows to Samsung Electronics' buyback of treasury shares for employee stock compensation and SK hynix's repurchase of shares for cancellation.

The gains came despite a weak session on Wall Street overnight. The NASDAQ Composite and the S&P 500 fell 0.76 percent and 0.28 percent, respectively, as major technology stocks retreated, while the Dow Jones Industrial Average edged up 0.26 percent.

Analysts said sentiment was weighed down by growing political pressure for regulation of AI data centers, as well as additional economic pressure measures against Iran by the Donald Trump administration.

Semiconductor stocks were also hit by news that Yangtze Memory Technologies, China's leading NAND flash memory maker, had filed for an initial public offering — following the recent listing of DRAM rival CXMT.

Major semiconductor names fell sharply in the US session: SanDisk dropped 6.45 percent, Micron fell 5.83 percent, Western Digital lost 5.24 percent, Seagate declined 6.51 percent, and SK hynix's ADR shed 4.92 percent. The Philadelphia Semiconductor Index fell 2.70 percent. Nvidia, set to report earnings this week, slid 2.91 percent, extending its losing streak to seven consecutive sessions.

On the domestic market, lingering disappointment over the scale of shareholder return programs announced by market heavyweights Samsung Electronics and SK hynix weighed on the Kospi early in the session. Once both stocks recovered their intraday losses, however, the broader index followed suit and turned positive.

Samsung Electronics, the Kospi's largest stock by market capitalization, closed unchanged from Monday at 257,000 won. The stock fell more than 3 percent at the open and at one point dropped to 245,000 won, a decline of 4.67 percent, before reversing to reclaim the 257,000-won level.

SK hynix rose 0.42 percent to close at 1.678 million won. The stock opened down around 4 percent and remained weak for much of the session before also turning higher intraday.

Among other large-cap stocks, Samsung Electro-Mechanics gained 3.34 percent, Hyundai Motor rose 1.69 percent, Samsung Biologics added 0.76 percent, Samsung C&T edged up 0.69 percent, and KB Financial Group climbed 2.02 percent.

Nuclear power-related stocks surged on reports that the US government had proposed to South Korea a stake investment in American nuclear firm Westinghouse. Doosan Enerbility jumped 10.55 percent, Kepco Engineering & Construction soared 20.27 percent, and Hyundai E&C advanced 14.87 percent.

Hanwha, which relisted Tuesday following a spin-off, surged 17.40 percent above its opening reference price, while newly listed subsidiary Hanwha Machinery & Service Holdings shot up to the daily limit of 13,000 won, a gain of 30 percent, during trading before settling to close just 0.10 percent higher.

SK Square fell 1.49 percent, LG Energy Solution dropped 3.45 percent, Samsung Life slipped 0.18 percent, Hanwha Aerospace declined 0.27 percent, and Hyundai Mobis edged down 0.10 percent.

The Kosdaq rose 13.82 points, or 1.70 percent, to close at 827.15. The index opened down 6.40 points, or 0.79 percent, at 806.93 and briefly dipped below the 800 level during the session before recovering and turning positive. On the Kosdaq, foreign investors and institutions were net buyers of 132.9 billion won and 15.1 billion won, respectively, while retail investors were net sellers of 137 billion won.

Rainbow Robotics gained 2.25 percent, Jusung Engineering jumped 7.71 percent, Wonik IPS rose 5.55 percent, Leeno Industrial advanced 4.33 percent, and HLB added 1.19 percent.

The three largest Kosdaq stocks by market capitalization all declined: Alteogen fell 4.68 percent, Ecopro dropped 3.07 percent, and Ecopro BM lost 3.85 percent. Semiconductor maker Hatchtech, which made its Kosdaq debut Tuesday, plunged 39.43 percent below its IPO price of 23,000 won.

The won weakened slightly against the dollar. As of 3:30 p.m. in the Seoul foreign exchange market, the won-dollar rate stood at 1,386.1 won, up 3.7 won from Monday's benchmark rate.