Kospi surged past 7,171 intraday on US semiconductor rally
Profit-taking ahead of Chuseok holiday trims gains; index closes up 0.15% at 7,017
Foreigners net buyers for third straight session; retail investors sell 1.6 trillion won
The Kospi surged more than 2 percent in early trading Tuesday, lifted by a sharp rally in US semiconductor stocks and growing hopes for peace talks between the United States and Iran, but gave back much of those gains as profit-taking ahead of the Chuseok holiday and a rebound in crude oil prices weighed on the market.
Sustained net buying by foreign investors kept the index in positive territory, however, allowing it to close with a modest gain and defend the 7,000 threshold.
The Kospi ended Tuesday up 10.19 points, or 0.15 percent, at 7,017.91. The index opened 153.89 points, or 2.20 percent, higher at 7,161.61 and briefly touched an intraday high of 7,171.44, a gain of 2.34 percent, before its upward momentum faded. The benchmark briefly dipped into negative territory during the afternoon session.
Despite some profit-taking and consolidation ahead of the Chuseok holiday, the Kospi extended its winning streak to three consecutive sessions and held the 7,000 line.
The advance was driven by foreign investors, who were net buyers for the third straight session. Foreigners posted net purchases of 85 billion won ($61.4 million) by the close of the regular session. Institutions, which had been net buyers early in the day, flipped to net selling and ended with net sales of 119 billion won. Retail investors sold a net 1.61 trillion won, capping the index's upside.
Wall Street's rise, fueled by strength in AI-related stocks, was seen as a positive catalyst for the domestic market.
The tech-heavy NASDAQ Composite jumped 2.3 percent overnight to close at 27,122.09, setting a new all-time closing high. The Dow Jones Industrial Average and the S&P 500 also finished higher, gaining 0.7 percent and 1.5 percent, respectively.
Meta shares surged 11.43 percent after the company's personal AI agent "Muse" topped the free apps chart on Apple's App Store, generating wide buzz.
The development helped ease some concerns about a recent debate over the pace of AI expansion and investment, boosting AI-related stocks broadly. Chipmakers AMD and Intel led the gains, jumping 9.95 percent and 12.14 percent, respectively, while the Philadelphia Semiconductor Index rose 4.29 percent.
Growing expectations for peace talks between the US and Iran also lifted investor sentiment. Anticipation that a summit-level meeting between the two countries could take place ahead of the UN General Assembly pushed West Texas Intermediate crude for October delivery down 4.5 percent, while Brent crude for November delivery fell 3.4 percent.
The yield on the 10-year US Treasury note, a global benchmark for interest rates, fell 2 basis points to 4.972 percent.
However, WTI futures reversed course and moved higher during the domestic session, adding to macroeconomic risks. WTI for October delivery was up 1.69 percent from Monday at $97.40 per barrel. The domestic market had drawn momentum from strength in large-cap semiconductor stocks early in the session but trimmed its gains as crude prices climbed.
Samsung Electronics closed up 0.91 percent from Monday at 276,500 won. Its shares opened 3.28 percent higher and briefly reached 283,500 won, a gain of 3.47 percent, before paring those gains by the close. SK hynix fell 1.50 percent to 1.84 million won ($1,330). The stock opened up more than 2 percent and briefly surged to 1.935 million won, a rise of 3.59 percent, before reversing lower.
Nuclear power-related stocks also gained ground. The Ministry of Trade, Industry and Energy reported to the National Assembly on one project it has decided to pursue and two others for which it has drawn up plans, all in connection with investment negotiations with the United States. Kepco Engineering & Construction rose 6.56 percent, Hyundai Engineering & Construction (Hyundai E&C) gained 4.54 percent, Daewoo Engineering & Construction (Daewoo E&C) advanced 2.79 percent and Doosan Enerbility added 1.41 percent.
Among other large-cap stocks, SK Square rose 0.53 percent, Samsung Electro-Mechanics gained 3.99 percent and Hyundai Motor added 0.42 percent. LG Energy Solution fell 0.43 percent, Samsung Biologics declined 0.78 percent and KB Financial Group lost 1.01 percent.
The Kosdaq fell 1.89 points, or 0.23 percent, to close at 834.38, snapping a six-session winning streak. The index opened up 9.87 points, or 1.18 percent, at 846.14 before turning lower during the session. Foreign investors and institutions were net sellers on the Kosdaq, posting net sales of 57.9 billion won and 94.5 billion won, respectively. Retail investors provided support, buying a net 156.3 billion won.
Alteogen fell 2.16 percent, Jusung Engineering declined 0.97 percent and Rainbow Robotics slipped 0.34 percent. Ecopro gained 0.25 percent, Ecopro BM rose 0.87 percent, Wonik IPS advanced 1.01 percent and Leeno Industrial surged 7.45 percent.
The won strengthened sharply against the dollar. As of 3:30 p.m. in the Seoul foreign exchange market, the won-dollar rate stood at 1,358.2 won, down 22.8 won from Monday's benchmark rate.
th5@heraldcorp.com
