SEOUL, September 01 (AJP) - South Korean stocks reversed early losses Tuesday morning, with the benchmark KOSPI edging higher as gains in Samsung Electronics and SK hynix offset renewed U.S.-Iran tensions, rising oil prices and pressure from higher U.S. Treasury yields.
The KOSPI stood at 6,844.90 as of 10:30 a.m., up 0.4 percent from the previous session. The index had fallen as low as 6,732.47 after opening lower before rebounding to an intraday high of 6,857.35, a swing of nearly 125 points.
The recovery came despite weak institutional flows. Foreign investors sold a net 139.3 billion won ($102 million) and institutions unloaded 526 billion won, while retail investors bought a net 308.2 billion won.
Chipmakers led the rebound. SK hynix rose 1.9 percent to 1,706,000 won and Samsung Electronics gained 0.3 percent to 260,750 won, reversing early losses with support from the companies' recent share buybacks.
Sentiment was also bolstered by fresh trade data. South Korea's semiconductor exports reached a record $46.65 billion in August, up 209 percent from a year earlier, according to the Ministry of Trade, Industry and Resources.
Semiconductors accounted for 47.5 percent of the country's total exports of $98.25 billion, as strong demand for high-bandwidth memory and server DRAM continued amid expanding investment in artificial intelligence infrastructure.
Battery and energy shares were also among the strongest performers. The oil and gas industry group rose 4.49 percent, the top-performing sector, while the secondary-battery production theme advanced 3.98 percent.
SK Innovation jumped more than 8 percent after its battery unit, SK On, said it would supply 9 gigawatt-hours of lithium iron phosphate battery cells to U.S. energy storage system maker Neovolta Power between 2027 and 2031.
LG Chem climbed 5.9 percent to 296,500 won and Samsung SDI rose 2.17 percent.
Trading companies gained 3.08 percent, led by POSCO International, up 4.28 percent, and LX International, up 2.3 percent. Display shares added 2.36 percent, with LG Display rising 2.65 percent.
Among other notable movers, BH surged 14.7 percent to 20,900 won and Kumho Electric gained 8.3 percent to 13,510 won, while LG Electronics dropped 4.9 percent to 206,000 won and LG Innotek slid 6.85 percent to 598,000 won.
KOSDAQ falls as foreign, institutional selling weighs
The smaller-cap KOSDAQ fell 1.18 percent to 824.48 as of 10:30 a.m., a much weaker showing than the KOSPI. The index traded between 819.74 and 833.52 during the morning session.
Retail investors bought a net 270.7 billion won, but the purchases were outweighed by foreign and institutional selling. Foreign investors sold a net 148 billion won and institutions shed 113.8 billion won.
Individual stocks showed sharp divergences. Daehan Fiber Optics fell 4.58 percent to 13,320 won, while nuclear-related Woori Technology dropped 8.1 percent to 10,660 won.
Among theme stocks, Pionex surged 29.9 percent, while Hyundai Pharm jumped 15.67 percent.
The divergence between the two indexes suggested buying remained concentrated in select large-cap semiconductor, battery and energy names rather than spreading broadly across the market.
Oil climbs as won strengthens
Oil prices extended gains as renewed fighting in the Middle East raised concerns about energy flows through the Strait of Hormuz.
West Texas Intermediate crude rose 1.04 percent to $86.62 a barrel, while Brent crude gained 0.7 percent to $91.09.
U.S. forces struck two Iranian rocket launchers on Larak Island, while Tehran responded with attacks targeting the United Arab Emirates and Jordan, marking a renewed escalation between Washington and Tehran.
Oil shipments continued through the Strait of Hormuz, but risks remained elevated after a supertanker struck two naval mines and caught fire.
Higher oil prices added another layer of pressure to global financial markets by raising inflation concerns at a time when investors were already pricing in the possibility of tighter U.S. monetary policy.
The benchmark U.S. 10-year Treasury yield climbed above 4.75 percent after Federal Reserve Chair Kevin Warsh signaled that further tightening could be needed if inflation fails to move convincingly toward the Fed's 2 percent target.
Wall Street also closed lower Monday, with the Dow Jones Industrial Average falling 0.70 percent, the S&P 500 losing 0.33 percent and the Nasdaq Composite slipping 0.12 percent.
Despite pressure on global bonds and equities, the Korean won strengthened 0.2 percent to 1,371.7 won per dollar.
Asian markets mixed
Markets were mixed Tuesday morning.
Japan's Nikkei 225 edged up 0.1 percent to 66,360.75, while China's Shanghai Composite was nearly flat, rising 0.02 percent to 3,987.05.
Hong Kong underperformed, with the Hang Seng Index falling 0.8 percent to 25,354.5.
The moves left the KOSPI outperforming most major regional indexes despite continued pressure from higher oil prices and U.S. bond yields.
AJP Takeaways
· The KOSPI reversed an early drop to rise 0.4 percent to 6,844.90, recovering from an intraday low of 6,732.47 as Samsung Electronics and SK hynix turned higher.
· Foreign and institutional investors remained net sellers, while retail investors bought 308.2 billion won, suggesting the index rebound was not backed by broad institutional buying.
· Semiconductor shares were supported by record August chip exports of $46.65 billion, while battery and energy stocks also gained on SK On's U.S. ESS battery deal.
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