South Korean equities endured a volatile holiday-shortened week, with the benchmark Kospi finishing slightly lower despite a powerful late-week rebound led by semiconductor heavyweights Samsung Electronics and SK hynix.
The Kospi ended Aug 21 at 6,912.95, leaving it about 0.9% below its Aug 14 close of 6,977.94. The Kosdaq suffered a much steeper weekly retreat, falling around 7.3% to 801.94 from 864.65. South Korean markets were closed on Aug 17 for the substitute holiday for Liberation Day.
Trading resumed on Aug 18 with the Kospi snapping a five-session winning streak. The index initially jumped as much as 2% before reversing course to close 1.55% lower at 6,869.83, as investors locked in gains and concerns over elevated oil prices and the US-Iran conflict weighed on sentiment. Institutions sold a net 784.9 billion won, although foreign and retail investors remained net buyers.
The sell-off accelerated dramatically the following day. The Kospi plunged 5.8% to 6,471.17, triggering a sell-side trading sidecar as rising global bond yields, higher oil prices and weakness in US technology shares hammered risk appetite. Samsung Electronics slumped 7.82%, while SK hynix tumbled 9.75%, with foreigners and institutions both turning net sellers.
But the mood flipped just as sharply on Aug 20 as the Kospi surged 5.89% to 6,852.58, almost recovering the previous day’s losses, after SK hynix unveiled a 40 trillion won share buyback plan and expectations grew that Samsung Electronics would announce a major shareholder return programme. Foreign investors poured a net 1.71 trillion won into the market, sending Samsung Electronics up 9.49% and SK hynix 12.73%. A buy-side sidecar was triggered during the rally.
The recovery extended into Aug 21, with the Kospi gaining another 0.88% to 6,912.95. Samsung Electronics added 3.87% and SK hynix climbed 2.31%, helping the benchmark overcome renewed pressure from US Treasury yields. Financial stocks also gained, although defence, shipbuilding and other sectors faced profit-taking.
The strength, however, was far from broad-based. The Kosdaq sank 4.63% on Aug 21 alone, with foreign and institutional selling hitting growth stocks as higher interest rates raised valuation concerns.
For the week, South Korea’s market delivered a clear split: Large-cap semiconductor stocks proved resilient enough to cushion the Kospi, while smaller growth shares remained under heavy pressure.
With bond yields, oil prices and Middle East tensions still clouding the external outlook, investor attention is likely to remain firmly on semiconductor earnings, shareholder returns and foreign fund flows in the week ahead.
