Kospi recovers 6,800 as 'other corporations' buy alone while individuals, foreigners and institutions all sell

The Kospi reversed course to close above the 6,800 mark Monday, even as individuals, foreigners and institutions all sold shares. A surge in net purchases by "other corporations" — a category that includes companies buying back their own stock — drove the index higher for a ninth consecutive session of net buying by that group.

According to Korea Exchange, the Kospi closed up 0.46 percent at 6,820.02 on Monday.

The index opened down 2.58 percent at 6,613.58 and at one point deepened its losses to 3.55 percent, touching 6,547.76, before swinging back and forth during the session to ultimately close higher.

Markets at home and abroad were weighed down by fresh signals from the Federal Reserve chair last week that another benchmark interest rate hike remained on the table.

Individuals net sold 144.3 billion won, foreigners net sold 639.9 billion won, and institutions net sold 793.1 billion won. Other corporations, by contrast, net bought 1.58 trillion won, cushioning the index against further declines.

Other corporations have been net buyers for nine straight sessions since Aug. 19. Their net purchases over the most recent week — from Tuesday through Monday — totaled 7.98 trillion won.

The buying is widely attributed to share buyback programs at Samsung Electronics and SK hynix. Samsung Electronics is scheduled to repurchase 15 trillion won worth of its own shares on the open market from Monday through Nov. 21, while SK hynix plans to buy back 40 trillion won worth from Thursday through Nov. 19.

Among large-cap stocks, Samsung Electronics closed up 1.17 percent at 260,000 won, and SK hynix rose 1.27 percent to 1,674,000 won. SK Square (up 0.88 percent), Samsung Electro-Mechanics (2.60 percent), LG Energy Solution (2.16 percent), Hyundai Motor (1.00 percent), Samsung Biologics (2.15 percent) and KB Financial Group (0.99 percent) also finished higher.

On the losing side, Samsung Life Insurance fell 1.29 percent, Hanwha Aerospace dropped 4.75 percent and Doosan Enerbility slid 6.46 percent.

Korea Zinc, which is embroiled in a management control dispute, fell 7.13 percent to close at 1,277,000 won. Korea Zinc and its rivals Youngpoong and MBK Partners are locked in a sharp exchange of accusations ahead of an extraordinary shareholders' meeting set for Sept. 9.

The Kosdaq closed down 0.49 percent at 834.29. Individuals net bought 253.3 billion won, but foreigners and institutions net sold 54.2 billion won and 201.5 billion won, respectively, pulling the index lower.

Alteogen, the Kosdaq's largest stock by market capitalization, fell 3.91 percent to close at 307,500 won. Ecopro (up 1.22 percent), Ecopro BM (2.20 percent), Rainbow Robotics (0.99 percent) and Jusung Engineering (0.11 percent) all finished in positive territory.

Margin financing balances — a gauge of leveraged investing — extended their rising streak to nine consecutive sessions. The outstanding balance stood at 33.34 trillion won as of Friday, climbing for nine straight sessions since Aug. 18.

Investor deposits held in brokerage accounts, which had fallen as low as the 96 trillion won range, are approaching the 100 trillion won threshold again. The balance reached 99.81 trillion won as of Friday, an increase of 3.1 trillion won from the previous day.

"The domestic market opened lower as it absorbed external variables including the Jackson Hole meeting and military tensions between the United States and Iran, but excessive caution eased as the rise in US Treasury yields stabilized," said Lee Kyung-min, an analyst at Daishin Securities. "With net buying by other corporations supporting the floor under the top two semiconductor stocks, large-cap chip shares recovered their intraday losses and the domestic market showed a pattern of early weakness giving way to late strength."