Key points
- Kospi rose as much as 6.20% intraday to 7,166.00 on July 22, then closed up only 0.74% at 6,797.70.
- A buy-side sidecar triggered at 9:06 a.m., the second one in two trading days after Tuesday's rally.
- SK Hynix opened up 8.88% and closed down 0.33%. Samsung Electronics opened up 5.60% and closed up only 0.58%.
- Kosdaq closed down 0.30% even as Kospi rose, a day after its trading value hit an 11-month low.
Kospi climbed as much as 6.20% early in the day touching 7,166.00, and gave almost all of that back by the close. It ended up just 0.74%, at 6,797.70. Samsung Electronics and Korea's SK Hynix had a similar day, just smaller. Both opened much higher, and SK Hynix still ended up lower by the close.
The move started before the Korean market even opened. Micron and other US chipmakers rallied hard overnight, and that overnight strength set up a rush of low-price buying in Seoul the moment trading began.
A buy-side sidecar, the second in two trading days
Kospi 200 futures rose more than 5% above the previous close within the first few minutes of trading and held there for over a minute, triggering a five-minute buy-side sidecar at 9:06 a.m., a program-buying pause the Korea Exchange uses to slow down moves that fast. It was the second buy-side sidecar in as many trading days. A similar one hit at 12:41 p.m. on Tuesday, when Kospi closed up 3.56% on record semiconductor export data. Two sidecars going the same direction inside a week that started with the market's worst one-month drop among 46 major economies shows how hard Korean stocks have been swinging in both directions this month.
Why the rally did not last
By the close, most of the morning's gain was gone. Lee Kyung-min, an analyst at Daishin Securities, said the domestic market opened sharply higher as low-price buying concentrated on semiconductor stocks, then gave back those gains on caution ahead of Alphabet's earnings report and rising international oil prices. He said investors are watching Alphabet's cloud business growth and its data center spending plans specifically, looking for a signal on whether AI investment keeps holding up.
Samsung and SK Hynix pulled apart by the close
Samsung Electronics opened at 273,500 won, up 5.60%. By the close it had given most of that back, ending at 260,500 won, up just 0.58%. That is about $174.
SK Hynix moved even more. It opened at 1,999,000 won, up 8.88%, then lost all of that during the day. It closed at 1,830,000 won, down 0.33%, or about $1,220. A stock that is up almost 9% before lunch and lower by the close is not a small round trip.
Foreign investors still net bought 2.621 trillion won of Korean stocks, about $1.75 billion, which kept Kospi's close from turning negative. Kosdaq, the exchange for Korea's smaller companies, did turn negative, closing down 0.30% at 751.09 even as Kospi finished higher. This site has already reported that Kosdaq's trading value fell to an 11-month low the day before, and Wednesday's split close is the same pattern again, with money moving in and out of Samsung Electronics and SK Hynix while Kosdaq is mostly left out of it.
Sources
- Herald Corp (Korean language): Kospi touches 7,166 intraday, retreats to close near 6,790, July 22
- Seoul Economic Daily (Korean language): Kospi touches 7,000 intraday on foreign buying, closes near 6,700 on profit-taking, July 22
- Our earlier coverage: Kospi's 3.56% rebound on record chip exports and Kosdaq's trading value hitting an 11-month low
Figures are from South Korean market reporting as described above, converted to US dollars at roughly 1,500 won to the dollar. This is general information about market conditions, not investment advice.
