Kospi Cuts Early Losses to Trade Near Flat as Samsung, SK Hynix Turn Higher

South Korea’s Kospi recovered much of its early slide on July 8 and was trading near flat after opening sharply lower. Samsung Electronics and SK Hynix, the country’s two biggest chipmakers, also reversed losses to trade higher.

As of 9:55 a.m., the Kospi was up 0.90% at 7,725.28 from the previous session. The index opened 2.66% lower at 7,452.48 and fell as much as 3.96% to 7,352.89 in early trading before trimming losses and reclaiming the 7,700 level.

The two semiconductor heavyweights both opened down more than 3% but later turned positive. Samsung Electronics rose 0.84% to 298,500 won after opening 3.55% lower and falling as far as 283,000 won. SK Hynix gained 5.20% to 2,315,500 won after starting the session down 3.77%.

Foreign investors continued selling on the Kospi, with net sales of 312.7 billion won extending their selling streak to 14 straight sessions. Retail investors were also net sellers, offloading 122.2 billion won.

Institutions were the only net buyers, with net purchases of 439.8 billion won. In the Kospi 200 futures market, foreigners were net sellers of 76 billion won, while retail and institutional investors were net buyers of 49.1 billion won and 18.7 billion won, respectively.

At the same time, the Kosdaq index was down 1.22% at 821.05. It opened 1.79% lower at 816.39 and at one point dropped 3.10% to 805.47 in early trading.

The VKospi, the Kospi 200 volatility index known as South Korea’s fear gauge, rose 1.28% from the previous session to 86.79, remaining above 80. In Seoul’s foreign-exchange market, the won was trading at 1,516.65 per dollar.

Han Ji-young, an analyst at Kiwoom Securities, said South Korean stocks were likely to face elevated volatility early in the session because of external pressures. Still, overnight losses in U.S. semiconductor shares had already been partly priced in, while bargain buying after a series of sharp Kospi declines this month could help the index stage an intraday rebound.

Kang Kyung-ju, Hankyung.com reporter qurasoha@hankyung.com