The KOSPI, which briefly fell below 6,500 in early trading, surged over 2% to reach 6,680. The rebound was driven by strong performances from major semiconductor stocks, including Samsung Electronics and SK Hynix, as both foreign and institutional investors engaged in net buying.
As of 11:32 a.m. on July 21, the KOSPI was up 164.88 points (2.53%) at 6,681.15 compared to the previous trading day.
Earlier in the day, the index dropped to 6,450 amid geopolitical uncertainties between the U.S. and Iran, hitting a low of 6,453.01 at 9:11 a.m. However, it quickly reversed course, recovering both the 6,500 and 6,600 levels.
In terms of market dynamics, institutions and foreign investors led the index's rise, with institutions net buying 624.7 billion won and foreign investors net buying 98.6 billion won. In contrast, individual investors were net sellers, offloading 727.4 billion won.
Among the top market capitalization stocks, semiconductor shares showed strong gains. Samsung Electronics traded at 256,500 won, up 5.12% from the previous day, while SK Hynix rose 3.29% to 1,822,000 won.
Hanwha Aerospace increased by 2.86% to 900,000 won, and HD Hyundai Electric was up 1.40% at 762,500 won. Samsung Electro-Mechanics remained flat at 1,275,000 won.
In contrast, the KOSDAQ continued to show weakness, diverging from the KOSPI's upward trend. The KOSDAQ index fell 12.83 points (1.71%) to 736.81. In this market, individual investors were net buyers of 138 billion won, while foreign and institutional investors sold off 91 billion won and 47 billion won, respectively.
The top stocks in the KOSDAQ showed mixed results. Alteogen rose 0.56% to 271,000 won, and Rainbow Robotics increased by 2.53% to 384,500 won. However, Ecopro fell 1.22% to 72,600 won, and Jusung Engineering dropped 2.03% to 164,500 won. Ecopro BM remained unchanged at 104,100 won.
The domestic stock market initially weakened due to investor sentiment being dampened by uncertainties surrounding military conflicts between the U.S. and Iran. However, the influx of buying from foreign and institutional investors, along with a sharp rebound in semiconductor stocks that had recently seen significant declines, quickly shifted the market's mood.
Analysts suggest that the recent excessive adjustments in the domestic stock market compared to major global markets may have contributed to the volatility. Last week, the KOSPI fell 8.77%, while the Philadelphia Semiconductor Index dropped 9.97%, indicating that the semiconductor sector's struggles impacted the domestic market's decline.
Global investment banks have noted that the KOSPI's valuation has reached historically undervalued levels. The KOSPI's 12-month forward price-to-earnings ratio (PER) is below 6, while the semiconductor sector's PER has dropped to around 4.
Seo Sang-young, a researcher at Mirae Asset Securities, stated, "The recent sharp decline in the KOSPI reflects an excessive expansion of losses due to the unwinding of global momentum and concerns over the semiconductor industry. Global investment banks are also focusing on the KOSPI's extreme undervaluation and solid fundamentals."
He added, "While the reduction in credit margin balances has eased overheating concerns, the increase in customer deposit balances is stabilizing market conditions. The key variable for the market going forward will be whether foreign investors will significantly shift their buying patterns."
* This article has been translated by AI.
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