Nvidia-inspired KOSPI rally subdued after BOK's 2nd straight rate hike
Summary
Seoul stocks fell just short of reclaiming the 7,000 mark on Thursday as Nvidia’s stronger-than-expected earnings sparked an early rally, but the Bank of Korea’s second straight rate hike tempered gains. The KOSPI opened at 6,996.12 and later closed at 6,912.37. Foreign and institutional investors bought shares, while retail investors sold heavily. The won also strengthened to 1,380.9 per dollar.
Key Facts
- Nvidia reported fiscal second-quarter revenue of $96.2 billion, up 106 percent from a year earlier and above Wall Street estimates.
- The Bank of Korea raised its benchmark interest rate from 2.75 percent to 3 percent.
- Foreign investors bought a net 152.4 billion won and institutional investors bought 177.6 billion won, while retail investors sold a net 1.91 trillion won.
A stock ticker at Hana Bank's headquarters in Seoul shows the benchmark KOSPI closing at 6,912.37, up 1.53 percent from the previous session, Thursday. Yonhap
Seoul stocks fell just short of reclaiming the 7,000 mark on Thursday, as Nvidia’s stronger-than-expected earnings fueled an early rally before the Bank of Korea’s (BOK) rate hike tempered gains.
The benchmark KOSPI opened at 6,996.12, up 2.76 percent from the previous session, after Nvidia reported fiscal second-quarter revenue of $96.2 billion, up 106 percent from a year earlier and above Wall Street estimates. The results reinforced expectations that artificial intelligence (AI) infrastructure investment and semiconductor demand remain intact, lifting chip stocks across the Korean market.
However, gains narrowed sharply around 10 a.m. following the central bank's decision to raise its benchmark interest rate from 2.75 percent to 3 percent. KOSPI later recovered some ground, but closed at 6,912.37, up 1.53 percent.
Foreign and institutional investors were net buyers, purchasing 152.4 billion won ($111 million) and 177.6 billion won, respectively. Retail investors, by contrast, sold a net 1.91 trillion won.
The two semiconductor heavyweights also finished higher, with Samsung Electronics rising 1.72 percent to 266,000 won and SK hynix gaining 2.49 percent to 1.73 million won.
The tug-of-war between AI-driven earnings growth and the trajectory of base interest rates is expected to shape KOSPI’s direction in September.
“Nvidia’s strong earnings should ease some of the concerns surrounding the AI and semiconductor industries, but the prospect of a peak in the economic cycle will likely keep investors wary of heightened market volatility,” said Byun Jun-ho, an analyst at IBK Securities. “The Korean market is likely to remain range-bound in September amid signs of an economic slowdown, the U.S.-China summit and the U.S. midterm elections, among other factors.”
Meanwhile, the secondary bourse Kosdaq opened 0.19 percent higher at 828.42 and maintained its gains, ultimately closing at 837.65, up 1.3 percent.
In the Seoul foreign exchange market, the Korean won continued to strengthen against the U.S. dollar, closing at 1,380.9 per dollar, up 3.9 won from the previous session.
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