The New York Stock Exchange saw a slight rebound, aided by the U.S. Treasury's expansion of its long-term bond buyback program, which helped ease the recent surge in bond yields. With the pressure from rising interest rates somewhat alleviated and SK Hynix's announcement of a large-scale share buyback and cancellation, attention turns to whether the domestic market can recover from its recent decline on August 20.
On August 19, the Dow Jones Industrial Average closed up 119.65 points (0.22%) at 53,463.05. The S&P 500 rose 16.22 points (0.21%) to finish at 7,707.98, while the tech-heavy Nasdaq gained 41.38 points (0.16%) to close at 26,331.09.
U.S. stocks rebounded after three consecutive days of declines. The Treasury's decision to increase the buyback size from $2 billion to at least $4 billion per session contributed to the easing of long-term yields, which had surged recently. The yield on 30-year Treasury bonds fell by more than 10 basis points to around 5.18%, while the 10-year yield dropped to 4.64%.
However, concerns about inflation stemming from the Middle East and the Federal Reserve's hawkish stance remain burdensome. The minutes from the July Federal Open Market Committee (FOMC) meeting revealed that many Fed officials believe monetary tightening may be necessary if inflation does not subside. Ongoing tensions between the U.S. and Iran have also contributed to rising international oil prices.
Semiconductor stocks continued to struggle, with Micron down 0.4% and SanDisk falling 3.5%. Nvidia also saw a 1.0% decline, reflecting ongoing volatility in the tech sector. In contrast, Moderna surged over 177% following positive results from its cancer treatment clinical trial, attracting strong buying interest in biotech and growth stocks.
In the domestic market, a potential rebound is anticipated due to bargain hunting following the previous day's sharp decline and the easing of long-term interest rates.
As of 8:29 a.m. on August 20, shares of Samsung Electronics rose 4.44%, while SK Hynix increased by 7.87%. Other major semiconductor and tech stocks, including SK Square (9.76%) and Samsung Electro-Mechanics (3.17%), also showed strength. Leading market players such as Hyundai Motor (1.69%), LG Energy Solution (1.12%), and Samsung Biologics (5.76%) all exhibited upward trends.
Notably, SK Hynix's decision to buy back and cancel approximately 40 trillion won worth of its shares over the next three months is expected to positively influence investor sentiment in the semiconductor sector. The company's existing shareholder return policy has also been revised upward from 'within 50%' to 'above 50%' of free cash flow, raising expectations for enhanced shareholder returns.
Market analysts suggest that while volatility may persist due to the recent sharp declines, the easing of long-term interest rates and the focus on shareholder return momentum from leading stocks could support a recovery in the domestic market.
Han Ji-young, a researcher at Kiwoom Securities, stated, "The easing of long-term interest rates due to the Treasury's buyback expansion and the surge in Moderna's stock are likely to improve investor sentiment in growth stocks, suggesting that both the KOSPI and KOSDAQ could see a recovery in momentum this week after their recent declines." He added, "SK Hynix's 40 trillion won share buyback and cancellation is expected to enhance earnings per share (EPS) due to a reduction in the number of shares outstanding and improve return on equity (ROE) due to a decrease in equity, thereby increasing price stability. The combination of shareholder return momentum from leading stocks, the easing of long-term U.S. bond yields, and a reduction in global semiconductor concentration is creating favorable conditions for a rebound in the domestic market."
* This article has been translated by AI.
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