KOSPI loses early gains as US tech rally fails to lift market
A stock ticker at Hana Bank's headquarters in Seoul shows the benchmark KOSPI closing at 7,017.91, up 0.15 percent from the previous close, Tuesday. Yonhap
After opening more than 2 percent higher on a strong overnight rally in U.S. artificial intelligence stocks, Korean stocks gave up most of its early gains on Tuesday.
The benchmark KOSPI opened at 7,161.61, up 2.2 percent from the previous close, according to the Korea Exchange. But gains steadily faded through the afternoon, with the index ultimately closing at 7,017.91, up just 0.15 percent.
Institutions and retail investors were net sellers of 119.1 billion won ($87.56 million) and 1.61 trillion won, respectively, while foreign investors bought a net 85.1 billion won.
The two semiconductor heavyweights both opened more than 3 percent higher before losing momentum. Samsung Electronics closed at 276,500 won, up 0.91 percent, while SK hynix fell 1.5 percent to 1.84 million won.
“Domestic risks facing the Korean stock market do not appear to be particularly significant. The VKOSPI, which gauges expected volatility in the KOSPI 200, has fallen substantially from this year’s peak of 95 percent to 44 percent,” said Kim Dae-jun, an analyst at Korea Investment & Securities.
“Extreme volatility seems to have eased, while the market’s underlying fundamentals appear strong enough to withstand external shocks as of now," he said.
Lee Sang-yeon, a research assistant at Shinyoung Securities, said a series of events from late September to early October could serve as potential catalysts for drawing foreign investors back into Korean equities.
A U.S.-China summit is scheduled for Thursday (local time). Micron is set to report its fiscal fourth-quarter results on Sept. 30, followed by Samsung Electronics’ preliminary third-quarter earnings report in early October.
The secondary bourse Kosdaq, meanwhile, reversed its early gains, opening 1.18 percent higher at 846.14 before closing at 834.38, down 0.23 percent.
In the Seoul foreign exchange market, the won strengthened 22.8 won against the U.S. dollar to close at 1,358.2 won.