South Korean shares surge 4.1% as chip stocks recover

SEOUL: South Korea’s KOSPI staged a sharp recovery on Wednesday morning, surging 4.1% in the first 30 minutes of trading after a nearly 10% plunge a day earlier, as retail investors rushed to buy the dip.

The KOSPI gained more than 330 points to 8,550.21 only moments after trading began at 0000 GMT, with SK Hynix gaining 5% and market bellwether Samsung Electronics jumping more than 9%.

The rebound instantly recouped a massive chunk of the previous session’s double-digit losses as retail investors flooded the order books, said Seo Sang-young, a strategist at Mirae Asset Securities Co.

“Retail investors going into leveraged ETFs is what is driving this volatility, as many were waiting for chances to go into the market out of FOMO (Fear of missing out),” Seo said.

“More volatilities are ahead, as Micron is due to report earnings soon while the US is waiting for inflation and jobs data.” Hyundai Motor and sister automaker Kia Corp were up 1.66% and 1.97%, respectively. Steelmaker POSCO Holdings added 0.93%, while drugmaker Samsung BioLogics rose 2.04%.

The KOSPI has risen 102.96% so far this year.

The won has weakened 6.2% against the dollar so far this year.

In money and debt markets, September futures on 3-year treasury bonds lost 0.04 point to 102.99.

The most liquid 3-year Korean treasury bond yield rose by 1.1 basis points to 3.783%, while the benchmark 10-year yield rose by 0.6 basis points to 4.184%.

Foreigners were net sellers of shares worth 626.3 billion won.