The Easy Knowledge Blog

Boosted by a Wall Street surge and the return of foreign buying, the KOSPI jumped 4.39% to 5,239.13, bouncing back after a run of steep losses.

Post Summary

After plunging 5.28% on the 5th and 6.02% on the 6th, then slipping another 0.81% on the 9th to 5,018.85, the KOSPI jumped more than 4% in a single day. It was the first rebound in four sessions and the first day in eight that foreign investors were net buyers. However, individuals sold heavily into the rally, which capped the gains. Here is a look at the index moves, investor flows, sector and stock action, and tonight’s key variable.

Buy Sidecars Triggered; Index Tops 5,300 Intraday, Closes at 5,239

The KOSPI opened above the previous close of 5,018.85 and surged from the start, and buy sidecars, which briefly suspend the effect of program buy orders, were triggered on both the KOSPI and the KOSDAQ. The index topped 5,300 intraday but finished at 5,239.13, a gain of 4.39%. The KOSDAQ also closed up 4.48% at 667.61, so both benchmarks rose more than 4% together.

The immediate trigger was Wall Street overnight. The Dow rose 2.15%, the S&P 500 rose 2.35% and the Nasdaq rose 2.74%, with a rebound led by semiconductor and tech stocks that carried over to Korea. KB Securities analyst Lim Jeong-eun said bargain buying in U.S. stocks and a sharp drop in oil prices fueled a rapid, chip-led rebound, and that investor sentiment improved in Korea as well.

Flows: Foreigners Net Buy for the First Time in 8 Sessions, Individuals Net Sell 1.3 Trillion Won

• Foreigners: Net bought 398.2 billion won of KOSPI shares, turning net buyers for the first time in eight sessions. On the KOSDAQ they net sold 125.3 billion won.
• Institutions: Net bought 473.5 billion won on the KOSPI and 225.0 billion won on the KOSDAQ, leading the advance. Financial investment firms, private equity funds and investment trusts, which represent ETF-related money, were among the buyers.
• Other corporations: Including demand from share buybacks, other corporations net bought 489.0 billion won on the KOSPI.
• Individuals: Net sold 1.3546 trillion won on the KOSPI and 94.8 billion won on the KOSDAQ.

Bizwatch noted a recurring pattern in which retail investors who bought near the second-quarter peak sell into every rebound. SBS Biz, meanwhile, reported foreign net buying of 423.1 billion won and individual net selling of 1.3819 trillion won, so tallies differ by outlet. This post uses the Bizwatch figures, which cite Korea Exchange data.

Sectors and Stocks: Chips Lead the Rebound, Beaten-Down KOSDAQ Large Caps Surge

KOSPI large caps: Samsung Electronics rose 4.74% to 198,900 won and SK Hynix rose 6.69% to 1,212,000 won in regular trading. SK Square gained 5.26% and Samsung Electro-Mechanics gained 4.63%.

KOSDAQ large caps: The rebound was strongest in large caps that had fallen the most, including machinery, construction and secondary batteries. EcoPro jumped 10.23% and EcoPro BM rose 8.7%, while Rainbow Robotics gained 7.44% and Simmtech gained 6.71%.

Variable: U.S. CPI Tonight, and the Fear Gauge Is Still in the 50s

The KOSPI 200 Volatility Index (VKOSPI), known as Korea’s fear gauge, fell 8.98% to close at 58.19. It dropped in a day, but the level itself remains high, a sign that volatility concerns have not faded.

KB Securities’ Lim said tonight’s U.S. consumer price index (CPI) is a key gauge of whether inflation worries are easing after the prior day’s drop in oil prices. The result could shape whether the rally in U.S. stocks and the rebound in Korea can continue.

Notes for Investors

• Even after this rebound, the KOSPI remains about 7.8% below its November 4 close of 5,683.80. A gain of more than 4% can be seen as recovering only part of the earlier losses.
• Foreigners turned net buyers after eight sessions, but one day of buying is not enough to declare a change of trend. On the other hand, some see ongoing supply pressure because retail selling shows up in each rebound.
• With the fear gauge in the high 50s, large daily swings may continue. Margin-funded investing carries forced-liquidation risk, and leveraged and inverse products can produce widely divergent results in volatile markets.
• This post is for informational purposes only and is not investment advice. Figures are based on reports as of November 10, and net buying and selling amounts by investor type may differ slightly by source and time of tally.

In short, on the 10th the KOSPI rose 4.39% to 5,239.13 on the Wall Street rebound and the return of foreign buying, and the KOSDAQ gained 4.48%. Individuals’ net selling of more than 1 trillion won and high volatility remain, so tonight’s U.S. CPI result looks set to be the next turning point for whether the rebound lasts.

Related Posts

• KOSPI slips 0.81% to 5,018 after intraday rebound to 5,172 as foreigners extend 7-session selling (Nov 9 market wrap)
• KOSPI plunges 6.02% to 5,059 as circuit breaker hits, U.S. AI data center regulation fears wipe out 11% in two days (Nov 6 market wrap)

Sources

• Bizwatch – KOSPI and KOSDAQ both gain 4% as individuals sell into the rebound (news.bizwatch.co.kr)
• SBS Biz – Foreigners are back as the KOSPI rebounds after four sessions (biz.sbs.co.kr)
• News1 – Foreigners return after eight sessions as the KOSPI jumps 4.39% and regains 5,200 (news1.kr)
• Seoul Shinmun – KOSPI closes down 0.81% at 5,018.85 on Nov 9 (seoul.co.kr)
• Business Korea – Nov 9 closing report (businesskorea.co.kr)