KOSPI jumped more than 3% in a single day, with a stronger won and a cautious bond market ahead of the Bank of Korea meeting
🎧 Post Summary
📌 1-Minute Summary
On October 21, the KOSPI closed at 5,735.66, up 182.92 points or 3.29% from the previous session. After plunging 3.73% the day before and briefly breaking below 5,500, the index won back the 5,700 level in a single day. A buy sidecar was triggered during the session, the 25th this year and the first in two months, since August 20.
The rebound was sparked by strong results from SpaceX in the United States. Revenue rose 161% and the company returned to profit, easing worries about AI profitability. Foreign investors net bought about 658 billion won. Samsung Electronics rose 5.67% and SK hynix gained 5.81%.
The won strengthened to 1,325.2 per dollar, down 2.9 won and the lowest dollar-won level since October 2024. The three-year Korean government bond yield fell to 3.822%, and the market expects the Bank of Korea to hold its policy rate at tomorrow’s meeting.
The KOSPI jumped more than 3% in one day and reclaimed the 5,700 level. The buy sidecar fired before the shock of the previous day’s plunge had even faded, making for a real roller-coaster session. Today we put the index move, the exchange rate and bond yields together in one place.
① KOSPI closes at 5,735.66, rebounding a day after the plunge
The KOSPI ended Wednesday at 5,735.66, up 182.92 points, or 3.29%, from the prior close of 5,552.74. On Tuesday the index had slid as low as 5,493.24 intraday, breaking 5,500, before closing near 5,550, so it recovered most of that loss within a day. The KOSDAQ also rose 10.79 points, or 1.38%, to 792.76.
In the morning, KOSPI 200 futures rose 5.22% to 904.84 from the reference price of 859.90, triggering a buy sidecar. It was the 25th this year and the first since August 20, two months earlier. A sidecar is a safety mechanism that briefly suspends program trading orders when futures prices move sharply.
② The key: SpaceX earnings and foreign buying
On Tuesday in the United States, SpaceX reported third-quarter revenue of $14.58 billion, up 161% from a year earlier, and announced a return to profit. AI-related revenue surged 830% to $7.56 billion, above the market forecast of $6.3 billion, which somewhat eased doubts about the profitability of AI investment.
On flows, foreign investors net bought about 658 billion won and led the rally, while individuals net sold about 1.1 trillion won and institutions net sold roughly 70 billion won. Samsung Electronics closed up 5.67% at 223,500 won and SK hynix rose 5.81% to 1,294,000 won. SK Inc. (+12.62%) and SK Square (+5.13%) also gained. By sector, oil and gas (+6.81%) and semiconductors (+5.43%) were strong, while cards (-1.64%) and autos (-0.76%) fell.
Elice, the AI infrastructure company that fell 32.04% on its first trading day, rose 29.92% to close at 79,900 won. Data showing that exports for October 1-20 rose 105.4% from a year earlier, with semiconductor exports up 222.5%, also supported sentiment.
③ Won at 1,325.2 per dollar, strongest since October 2024
The dollar-won rate closed the daytime session at 1,325.2, down 2.9 won from the previous day. That is the lowest level since October 2, 2024, and the fourth straight session of lower lows. On the same day foreign investors turned net buyers in the KOSPI, and the dollar index fell 0.25% overnight to 101.71. However, with oil prices still elevated and US interest rates high, it remains to be seen whether the won can keep moving in this direction.
④ Bond yields dip, eyes on tomorrow’s BOK meeting
With the Bank of Korea’s Monetary Policy Board meeting a day away, Korean treasury yields fell across most maturities. The three-year yield fell 1.8 basis points to 3.822%, the five-year fell 2.5bp to 3.965% and the ten-year fell 1.6bp to 4.160%. The 20-year yield, by contrast, rose 1.8bp to 4.197%. The three-year AA- corporate bond yield was 4.515%, and the 91-day CD rate was unchanged at 3.260%.
Net buying by foreign investors of 3,635 three-year and 372 ten-year bond futures contracts pushed yields lower. In a Korea Financial Investment Association survey of 100 bond professionals conducted October 12-15, 93% expected the policy rate to be held on October 22, while 7% expected a hike. Kiwoom Securities analyst Ahn Ye-ha said there was no major catalyst and that the drop in yields was limited ahead of the meeting.
⑤ External factors: oil, US yields and the FOMC
International oil prices edged down as the possibility of diplomatic mediation between the United States and Iran drew attention. Brent crude for December delivery on the London ICE exchange closed at $108.79 a barrel, after nearly touching $112 intraday for a five-month high and then giving back the gains. The US 10-year Treasury yield fell 2.8bp but remains around 5%, a burden on valuations of AI-related stocks. The Federal Reserve’s FOMC meeting is scheduled for October 27-28.
📌 Good to know
- One-day rebound is not a trend reversal. The KOSPI slid from 6,384 on October 12 to 5,552 on October 20 before bouncing back, so volatility remains high.
- The AI profitability debate drives the market. SpaceX’s results eased worries, but as Elice’s plunge right after listing showed, expectations and caution about AI investment keep alternating.
- A stronger won cuts both ways. It helps import prices and foreign inflows, but can weigh on exporters’ won-denominated earnings.
- The BOK meeting and FOMC are coming. A hold is the consensus for tomorrow, but the tone of the governor’s remarks and next week’s FOMC outcome could move rates and the exchange rate again.
In summary, on October 21 SpaceX’s results eased AI profitability worries and foreign buying lifted the index, the won strengthened to its strongest level in about two years, and the bond market stayed calm ahead of the BOK meeting. External variables such as oil and US yields remain, so caution still seems warranted through tomorrow’s meeting and next week’s FOMC. This post is not investment advice, and investment decisions and responsibility rest with the individual.
References
- Newdaily – KOSPI roller coaster heads back up, returning to a bull market in a day (biz.newdaily.co.kr)
- Hankook Ilbo – KOSPI retakes 5,700 after buy sidecar; Elice also rebounds to limit up (hankookilbo.com)
- Specialtimes – Treasury yields dip a day before BOK meeting; 3-year at 3.822% (specialtimes.co.kr)
- Seoul Shinmun – Falling exchange rate, rising KOSPI (seoul.co.kr)
- Money Today – KOSPI up 182.92 points (3.29%) to close at 5,735.66 (mt.co.kr)
- Daily Pop – Daily rates and FX briefing, Oct. 21: 5-year Treasury yield falls (dailypop.kr)
- Newspim – Global Market Report, Oct. 21 (newspim.com)