Kospi Closes at Record 7,844.01 a Day After Sharp Selloff

Sideline Cash Pours In as Index Ends at 7,844.01

Morgan Stanley Says 10,000 Is Possible

South Korea’s Kospi rebounded a day after a steep drop to finish at a record closing high. Global stocks fell overnight, stoking concerns about investor sentiment, but funds that had been waiting for a pullback flowed into equities and fueled the recovery.

On May 13, the Kospi rose 2.63% from the previous session to close at 7,844.01. That topped the previous record closing high of 7,822.24 set on May 11.

The benchmark extended its decline early in the session, falling for a second straight day at the open. It dropped to 7,406.14 at about 9:15 a.m. after semiconductor shares slid in the US overnight, with Micron Technology down 3.7% and SanDisk off 6.2%. Samsung Electronics and SK Hynix also weakened.

The Kospi then rapidly erased its losses. It turned positive against the previous close at about 10:20 a.m. and ended the session at an all-time closing high. Hyundai Motor Group shares, which had held up even during the previous day’s selloff, led the advance.

Hyundai Motor, lifted by robotics optimism, jumped 9.91% to close at 710,000 won, a fresh 52-week high. Hyundai Mobis surged 18.43% and Hyundai AutoEver climbed 13.66%.

Semiconductor shares, which were weak early in the session, also rebounded. Samsung Electronics rose 1.79% to 284,000 won, while SK Hynix gained 7.68% to 1.976 million won. Sentiment toward chip stocks improved after US President Donald Trump said in the morning that Nvidia Chief Executive Officer Jensen Huang had boarded a flight to China. Samsung Electro-Mechanics rose as high as 1.029 million won, joining the ranks of so-called emperor stocks, or shares trading above 1 million won each. Socar rose 29.95%, Hanwha Galleria gained 30.00%, and Chunil Express added 29.79%, all hitting their daily price limits.

Individuals and institutional investors led the rally, each posting net purchases of 1.8 trillion won.

Experts say investor deposits, which have swelled to nearly 140 trillion won, provided the main fuel for the rebound. According to the Korea Financial Investment Association, investor deposits totaled 137.4174 trillion won as of May 12. The move suggests investors who failed to buy enough during the rally are stepping in aggressively on short-term pullbacks. Foreign investors, by contrast, sold nearly 4 trillion won worth of shares again on May 13.

Global investment banks have also continued to raise their targets for the Kospi. Morgan Stanley said in a May 12 report that it expects the index to reach 9,500 this year. The bank projected the Kospi would hit 8,500 in the first half and rise further in the second half. In a bull-market scenario, it said, the index could reach 10,000.

Kang Jin-kyu, Korea Economic Daily reporter josep@hankyung.com