Kospi rebounds 5.89% after worst day in weeks as SK Hynix announces $28.6 billion buyback

The Kospi rose 5.89% to close at 6,852.58 on Thursday, one day after it fell 5.80% to 6,471.17, its worst day in weeks. Samsung Electronics and SK Hynix, which had led Wednesday's losses, led Thursday's gains instead.

Samsung closed at 271,000 won ($195 USD), up 9.49%, after falling 7.82% to 247,500 won ($177 USD) the day before. SK Hynix closed at 1,691,000 won ($1,214 USD), up 12.73%, after falling 9.75% to 1,500,000 won ($1,071 USD). SK Square (SK스퀘어), SK Hynix's largest shareholder, rose 11.85% the same day.

Im Jung-eun, a researcher at KB Securities (KB증권), pointed to two things happening at once. "The interest-rate burden that had been the key factor behind the previous session's pullback eased somewhat, and combined with the news of SK Hynix's shareholder returns, that strengthened the basis for the rebound," Im wrote. "SK Hynix's announcement of a large-scale buyback and cancellation, together with expectations for Samsung's own shareholder returns, drove strength across the sector, centered on the big semiconductor names," Im added.

What Wednesday looked like

Wednesday's selloff had global roots. Global bond yields spiked, and tension around the Strait of Hormuz pushed oil prices higher after Iran said the strait stayed closed to shipping despite comments from President Trump that it was open.

Foreign investors sold 4.02 trillion won ($2.88 billion USD) of Kospi stock that day, and institutions sold another 1.79 trillion won ($1.28 billion USD), while individual investors tried to buy the drop, net buying 5.64 trillion won ($4.04 billion USD) that didn't stop the fall. The Kosdaq, Korea's smaller secondary market, held up better, falling just 1.17%.

Thursday reversed the flow entirely. Foreign investors turned into net buyers, adding 1.71 trillion won ($1.23 billion USD) to the Kospi, and a buy-side circuit breaker fired at 9:57 a.m. as Kospi 200 futures rose more than 5% within a minute. It was the 49th circuit breaker triggered in Korea this year, and the 24th on the buy side. The Kosdaq rose 1.99% to 840.89.

Where the buyback fits in

The reversal traces back to Wednesday night. SK Hynix's board voted after the market closed to buy back and cancel 40 trillion won ($28.6 billion USD) of its own stock, the largest such move by any Korean listed company, and it raised its payout target for 2025 to 2027 to at least half of free cash flow. The vote came too late to help Wednesday's session, but Thursday's traders had all night to react to it.

Samsung hasn't announced anything of its own yet, but the pressure is building. A shareholder group called ACT (액트) wants Samsung to commit to a buyback of at least 45.5 trillion won ($32.5 billion USD), and Samsung's own management has said a shareholder-return plan is coming this month, with a board vote possible in September. Thursday's 9.49% gain looks like a bet that Samsung gets there.

Meanwhile, the won gained too, closing at 1,392.6 to the dollar, down from 1,397.7 a day earlier.

Samsung's board is expected to take up its own return plan in September. Whether Thursday's rally holds may depend on what it decides.