Yesterday the market triggered a sell-side sidecar; today it triggered the exact opposite, a buy-side sidecar
🎧 Post Summary
📌 1-Minute Summary
The KOSPI surged 5.89% (381.41 points) today to close at 6,852.58, erasing nearly all of yesterday’s sharp decline. SK hynix jumped 12.73% after announcing a massive 40 trillion won share buyback and cancellation plan, and Samsung Electronics rose 9.49% as well. Adding to the rally, surging US Treasury yields eased after the US Treasury announced it would double its long-term bond buyback program. Foreign investors net bought 1.7228 trillion won, driving the index higher, while individuals and institutions net sold 2.2714 trillion won and 490.3 billion won respectively.
Yesterday we reported that the KOSPI plunged 5.80% after President Trump’s remarks declaring the Strait of Hormuz “new US territory.” Within a single day, the market completely flipped. Yesterday brought a sell-side sidecar; today brought a buy-side sidecar, an extreme swing from one pole to the other. Here’s a step-by-step look at what happened.
A Explosive Rebound From the Open, Touching 6,900 Intraday
The KOSPI opened up a strong 209.17 points (3.23%) at 6,680.34 today. From there, gains kept building, and at 9:57 AM a buy-side sidecar was triggered on the KOSPI market, the 49th sidecar of the year and the 24th buy-side sidecar. The index kept climbing afterward, briefly touching 6,904.55 intraday and breaking above the 6,900 level. The KOSPI ultimately closed up 381.41 points (5.89%) at 6,852.58. Given that the index had fallen 398.66 points in a single day yesterday, this means most of that decline was reversed within a single trading day. The KOSDAQ rose in tandem, up 16.43 points (1.99%) to 840.89.
The First Reason for the Rebound: SK Hynix’s ‘Surprise Gift’
The single biggest trigger behind today’s gains was SK hynix. The company disclosed a plan to buy back and cancel shares worth a staggering 40 trillion won. That news alone sent SK hynix shares up 12.73%. For readers with a memory of the backstory, this makes the news even sweeter: after its Nasdaq listing last month, SK hynix faced a question about its shareholder return plans during its earnings conference call and offered only a vague “we’re reviewing it” response, leaving investors frustrated. The result of that “review” has finally arrived, and at a staggering scale of 40 trillion won. The news carried straight over to holding company SK Square as well, which rose 11.85%.
The Second Reason: US Treasury Yields Calmed Down
Another factor behind the rally was the easing of US-driven rate anxiety. Yesterday, the US 30-year Treasury yield broke above 5.33%, its highest level in 19 years since 2007, and that news had weighed on valuations across Big Tech and chip stocks broadly, acting as a headwind for Korean markets too. But the US Treasury announced it would double the size of its long-term bond buyback program, from $2 billion to at least $4 billion per operation. Markets read this as a strong signal of the US government’s determination to curb rising long-term rates, and the 30-year yield indeed eased by more than 0.1 percentage points within a single day. That news revived risk appetite and provided a tailwind for Korean markets as well.
Samsung Up 9.49%, Samsung Preferred Up 10.07% — A Clear Chip-Stock Tilt
The SK hynix tailwind carried straight over to Samsung Electronics as well. Samsung Electronics surged 9.49%, and Samsung Electronics preferred rose 10.07%. Samsung C&T, which holds a stake in Samsung Electronics, rose 7.78% too. By contrast, Samsung Electro-Mechanics (0.65%), Hyundai Motor (0.85%), and LG Energy Solution (0.14%) stayed roughly flat, and Hanwha Aerospace actually fell 0.85%, showing that today’s rally was concentrated heavily in chip stocks specifically. On top of that, news that Moderna succeeded in Phase 3 trials for a skin cancer treatment overnight on the Nasdaq (its shares soared 176.97%) also stirred Korean biotech stocks. Alteogen surged 11.86%, with ABL Bio (3.51%) and Pharma Research (5.7%) also posting gains.
Foreigners Bought Alone, While Individuals and Institutions Took Profits
The flow pattern was clear-cut too. Foreign investors net bought 1.7228 trillion won, effectively driving today’s rally on their own. Individuals and institutions, by contrast, net sold 2.2714 trillion won and 490.3 billion won respectively. This is seen as individuals, who had bought the dip during yesterday’s crash, cashing in on that rebound as the index surged today, recovering losses and taking profits. Foreign investors did show a somewhat mixed stance, however, net selling 1.87 trillion won in KOSPI 200 futures even as they bought heavily in the cash market. The won-dollar exchange rate fell (a stronger won) 5.1 won to trade in a stable range of 1,380-1,390 won.
Investor Takeaways
- Remember that back-to-back days saw opposite sidecars triggered: Yesterday brought a sell-side sidecar, today a buy-side sidecar, extreme volatility by any measure. In markets swinging this sharply, it matters more to track the overall trend than to react to each day’s move.
- Today’s rally was concentrated heavily in chip stocks: Core chip names like SK hynix and Samsung Electronics surged, but other large caps stayed roughly flat. It’s worth noting that gains weren’t spread evenly across the index.
- SK hynix’s share cancellation is worth watching for actual execution: The 40 trillion won figure is a disclosed “plan,” so it’s important to check follow-up disclosures on the actual timeline for the buyback and cancellation.
- Keep watching US Treasury yield trends: A significant part of today’s rebound stemmed from easing US long-term rates. Whether that trend continues or turns anxious again could be a key variable for markets next week.
Taken together, today’s sharp rebound was the product of two favorable catalysts converging: SK hynix’s dramatic shareholder return announcement and easing US Treasury yields. The fact that a market crushed by geopolitical risk just yesterday fully recovered within a day on corporate earnings and policy catalysts once again shows just how sensitive the current KOSPI is to headline-driven swings. Still, given that today’s rally was concentrated in chip stocks, whether this warmth spreads to other sectors is the next thing to watch.
Sources
- Businesskorea — “[Market Close] KOSPI Sharply Reclaims 6,850 Level Amid Buy-Side Sidecar… Won-Dollar Rate Closes Down 5.1 Won” (businesskorea.co.kr)
- Hankyung — “KOSPI Surges Over 5% on Samsung and SK Hynix… Foreigners Buy 2.2 Trillion Won” (hankyung.com)
- Ezyeconomy — “KOSPI Reclaims 6,850 Level… Surges 5.9% on Foreign Buying, ‘Chip Stock Bonfire’” (ezyeconomy.com)
- Opinion News — “KOSPI Surges 6% to Close at 6,852 on Foreign Buying… ‘Chips Only’ Show Extreme Strength” (opinionnews.co.kr)
- Getnews — “KOSPI Surges Roughly 6% on SK Hynix’s Shareholder Return Announcement, Among Other Factors” (getnews.co.kr)