Kospi Gains on Retail, Institutional Buying; Kosdaq Triggers Buy Sidecar

South Korea's Kospi rose on May 22, while the Kosdaq jumped sharply enough to trigger a buy sidecar for a second straight day. Expectations that the newly launched National Growth Fund will invest in Kosdaq-listed companies appeared to lift investor sentiment.

As of 10:51 a.m., the Kospi was up 43.21 points, or 0.55%, at 7,858.80.

Retail and institutional investors were net buyers of 1.4155 trillion won and 513.4 billion won, respectively, on the main board. Foreign investors, by contrast, were net sellers of 1.9767 trillion won in cash equities and 296 billion won in Kospi 200 futures.

Most of the market's biggest companies were trading higher.

Samsung Electronics fell 1.34%, while SK Hynix hovered near flat. Samsung Electronics rose above 300,000 won for the first time in regular trading earlier in the session, touching a record 300,500 won, before reversing course on profit-taking.

Samsung Electro-Mechanics jumped 6.31%.

Doosan Enerbility gained 4.34%.

The Kosdaq climbed 53.30 points, or 4.82%, to 1,159.27. In that market, foreign and institutional investors were net buyers of 534.2 billion won and 232.3 billion won, respectively, while retail investors sold a net 738.7 billion won.

At about 9:33 a.m., the Kosdaq market triggered a temporary halt on program buy orders, known as a buy sidecar. The measure was activated after Kosdaq 150 futures rose more than 6% from the previous session and the Kosdaq 150 index stayed up more than 3% for one minute, suspending program buy orders for five minutes.

Expectations that funds from the National Growth Fund, which began sales on May 22, will flow into Kosdaq companies appear to have fueled the surge. Yeom Dong-chan, an analyst at Korea Investment & Securities, said the fund's main purpose is to supply capital to companies with promising advanced technologies so they can move smoothly through the scale-up stage.

He added that venture companies are more likely to receive funding than mid-sized firms, and Kosdaq-listed companies more likely than Kospi-listed peers.

Most of the Kosdaq's top market-cap stocks posted steep gains.

A roughly 3% rise in Rainbow Robotics, LEENO Industrial and EO Technics looked modest by comparison.

EcoPro BM and EcoPro surged 10.77% and 12.1%, respectively.

Biotech shares also rallied, with Alteogen up 6.05%, Kolon TissueGene gaining 6.8%, Samchundang Pharm rising 4.51% and HLB advancing 10.26%.

In Seoul's foreign-exchange market, the won was trading at 1,511.2 per dollar, up 3.2 won, or 0.21%, from the previous session.

Han Gyeong-u, Hankyung.com reporter case@hankyung.com