Kospi Tops 7,800 for First Time, Triggering Buy Sidecar Early in Trade

Chip Stocks Surge as Samsung Electronics Tops 288,000 Won and SK Hynix Breaks Above 1.9 Million Won

South Korea’s Kospi rose above 7,800 for the first time ever on May 11, extending its record-setting rally. A buy-side sidecar was triggered after a sharp early jump in the benchmark. Samsung Electronics and SK Hynix also continued their run to all-time highs.

As of 9:43 a.m., the Kospi was up 359.63 points, or 4.8%, at 7,857.63. The index opened 3.7% higher, and the early surge triggered a buy-side sidecar, a temporary suspension of program buy orders.

When the measure was activated, Kospi 200 futures were up 58.82 points, or 5.10%, at 1,210.54 from the previous close. It was the first buy-side sidecar on the Kospi since May 6 and the eighth this year. A Kospi sidecar is triggered when Kospi 200 futures rise 5% or more from the reference price and remain there for one minute. It suspends program buy orders for five minutes.

The advance followed strength in U.S. technology shares at the end of last week. On May 8, the S&P 500 rose 0.84% and the Nasdaq Composite gained 1.71%, with both indexes reaching record highs. The Philadelphia Semiconductor Index climbed 5.51% the same day.

In the main Kospi market, retail investors were net buyers of 617.2 billion won. Institutions were also net buyers with 77.1 billion won of purchases. Foreign investors were net sellers of 704.1 billion won.

The country’s two biggest chipmakers led the gains. Samsung Electronics rose 7.26% to 288,000 won, while SK Hynix climbed 12.57% to 1.898 million won. SK Hynix also traded above 1.9 million won during the session. Samsung Electronics preferred shares, SK Square, Samsung C&T and Samsung Life Insurance also advanced.

The Kosdaq fell more than 1%. As of that time, the index was down 1.07% at 1,194.74. On the Kosdaq, foreign and institutional investors were net sellers of 142.8 billion won and 130.6 billion won, respectively. Retail investors alone were net buyers with 295.1 billion won.

The won opened stronger against the dollar. In Seoul trading, the won-dollar exchange rate opened at 1,466.0 won per dollar, down 5.7 won from the previous session.

Noh Jung-dong, Hankyung.com reporter dong2@hankyung.com