Kospi, Kosdaq surge more than 4% in broad rebound

South Korean stocks staged a broad rebound Tuesday after three consecutive sessions of sharp losses driven by fears that a sweeping Democratic Party victory in US midterm elections — dubbed a "blue tsunami" — would delay or disrupt data center development.

Kospi closed up 220.28 points, or 4.39 percent, at 5,239.13. The index opened 228.37 points, or 4.55 percent, higher than Monday's close and briefly touched the 5,300 level during the session. The early surge triggered sidecar buy-side circuit breakers on both the Kospi and Kosdaq markets within roughly six minutes of the opening bell.

The rebound was driven in part by a reversal among foreign investors, who had been net sellers on Kospi for seven consecutive sessions through Monday. Institutions, already on a five-session net-buying streak, added 473.3 billion won ($349 million) in net purchases Tuesday, while foreign investors returned to buying after seven sessions on the sidelines, posting net purchases of 396.7 billion won. Retail investors, by contrast, were net sellers of 1.35 trillion won.

Samsung Electronics and SK hynix surged 4 percent and 6 percent, respectively, helping the two companies' combined market capitalization recover to 2,000 trillion won for the first time in three sessions. Samsung Electronics briefly climbed as much as 6 percent intraday, reclaiming the 200,000-won level, before paring gains to close in the 190,000-won range. SK hynix hit an intraday high of 9.3 percent and recaptured the 1,200,000-won level for the first time since Thursday.

The rally reflected an overnight rebound in technology stocks on Wall Street, which had been battered by the blue-wave fallout. The Dow Jones Industrial Average rose 2.15 percent Monday, while the S&P 500 and the NASDAQ Composite gained 2.35 percent and 2.74 percent, respectively.

The Philadelphia Semiconductor Index surged 6.86 percent, buoyed by bargain hunters. AMD jumped 13.26 percent, Broadcom gained 8.78 percent, Marvell rose 9.49 percent and Micron Technology climbed 6.25 percent.

Global markets, which had reacted sharply to headwinds including potential data center regulation following the US midterm elections, stabilized — a shift that helped reset the tone for domestic trading.

Han Ji-young, a researcher at Kiwoom Securities, said the scale of last week's selloff — which pushed the correction to levels comparable to past crises such as the IMF crisis, the dot-com bubble collapse and the global financial crisis — means upcoming events could serve as catalysts for a sentiment turnaround. Han cited the release of US October consumer price index data this week and earnings from AI infrastructure firm CoreWeave as key events to watch.

Expectations that hedge fund position unwinding and supply-demand instability — key drivers of the recent plunge — may be easing also supported Tuesday's rebound. With concentrated selling in AI and semiconductor-related positions having largely run its course, additional selling pressure appeared limited. Falling oil prices and stable interest rates also helped create conditions for foreign investors to take a more constructive view of the domestic market.

However, it remains to be seen whether foreign buying on Kospi, which came in below 400 billion won Tuesday, will develop into a sustained trend. Even within Tuesday's session, foreign investors showed divergent behavior toward the two flagship chipmakers — net selling Samsung Electronics by 44.9 billion won while net buying SK hynix by 106.9 billion won.

Market watchers also note that Anthropic's initial public offering — with a reported offering size of around 135.5 trillion won ($99.9 billion) — could come as soon as next week, potentially capping gains in large-cap stocks as global investors raise cash to participate in the subscription.

According to the Wall Street Journal and other foreign media, Anthropic plans to begin trading on NASDAQ under the ticker "ANT" on Nov. 19 or Nov. 20. The massive IPO is seen as a potential source of selling pressure on market leaders, as global investors liquidate positions to secure subscription funds.

Han said that while market skepticism over the Democratic Party's data center regulation stance will persist for now, near-term sentiment will hinge on key macroeconomic data due this week and Nvidia's earnings, scheduled for release Nov. 17.

Kosdaq closed up 28.64 points, or 4.48 percent, at 667.61. On the Kosdaq market, retail investors were net sellers of 56.3 billion won, while institutions were net buyers of 214.8 billion won.