South Korean Shares Surge on Dip Buying Amid Tech Rebound and Global De-escalation Hopes

South Korean Shares Surge on Dip Buying Amid Tech Rebound and Global De-escalation Hopes​

South Korean equities managed a significant rebound on Wednesday, bouncing back from the massive losses recorded in the previous session. The market saw renewed bullish interest, driven by investors focusing keenly on the earnings performance of domestic chipmakers and major U.S. technology firms. This reversal comes after the benchmark index hit multi-month lows just two days prior.

KOSPI Bounces Back as Tech Stocks Rally​

The Korean Composite Stock Price Index (KOSPI) climbed 89.95 points, translating to a 1.49% rise, closing at 6,113.61 as of 0052 GMT. The index saw gains up to 3.4% earlier in the trading session. This recovery contrasts sharply with Tuesday's performance when KOSPI fell by 10.8%, marking its biggest daily loss since March 4 and the lowest close since April 14.

Analyst Han Ji-young of Kiwoom Securities suggested that this rebound is rooted in dip buying, bolstered by hopes concerning U.S.-Iran negotiations and easing concerns surrounding the Federal Reserve's upcoming policy meeting. Furthermore, Han noted that KOSPI currently resides in oversold territory of record levels, with valuations measured at historic lows.

Chipmakers Lead Gains as Domestic Markets Improve​

The semiconductor sector showed resilience, with Peer chipmaker Samsung Electronics rising 4.09%. SK Hynix managed a modest gain of 0.26%, effectively erasing earlier gains exceeding four percent. Earlier in the session, SK Hynix had reported bumper quarterly results but these did not meet elevated investor expectations fuelled by the AI boom narrative.

In the broader market movement, out of 912 traded issues, 532 shares saw an advance, while 343 declined. Foreign investors were net buyers in the session, purchasing shares valued at 264.5 billion won ($181.8 million).

Currency and Bond Market Movements​

The South Korean Won depreciated slightly, quoted at 1,456.2 per dollar on the onshore settlement platform, which registered a decline of 0.14% from its previous close of 1,454.1.

In the money and debt markets, the benchmark 10-year Korean treasury bond yield decreased by 0.2 basis points to 4.294%. Meanwhile, the most liquid 3-year Korean treasury bond yield rose marginally by 0.6 basis points, reaching 3.837%. September futures on 3-year treasury bonds were recorded at 102.97, losing 0.03 point.