Kospi Reclaims 6,900 as Samsung, SK Hynix Gain on Shareholder Return Bets

The Kospi rebounded modestly on Aug. 21, reclaiming the 6,900 level as gains in semiconductor heavyweights Samsung Electronics Co. and SK Hynix Inc. offset broad weakness across the market. The index had fallen more than 1% at the open, but reversed course after the two stocks turned higher. Expectations for large shareholder returns drew buying into both names.

The Kospi closed up 60.37 points, or 0.88%, at 6,912.95, according to AI-based investment information platform Epic AI. It was the first close above 6,900 since Aug. 14, when the benchmark ended at 6,977.94.

The index opened down 92.63 points, or 1.35%, and traded in the mid-6,700 range early as investors locked in profits after the previous session's sharp rally. It turned positive about 40 minutes after the open as Samsung Electronics and SK Hynix swung into gains. Strength in memory-chip makers on Wall Street overnight also helped sentiment.

Market breadth remained weak, with 683 stocks falling against 193 gainers. Still, Samsung Electronics and SK Hynix extended their advances on expectations for large shareholder returns, helping lift the benchmark.

Lee Kyung-min, an analyst at Daishin Securities, said SK Hynix drew concentrated net buying from other corporations after deciding to repurchase 40 trillion won of its own shares on the open market. He said the move reflected anticipated demand tied to the buyback.

Lee added that Bloomberg had reported Samsung Electronics would announce a new shareholder return package worth 90 trillion won to 110 trillion won at 4 p.m. on Aug. 21. That expanded momentum for shareholder returns and added upward pressure on Samsung affiliates, helping drive the index higher.

Kim Seok-hwan, an analyst at Mirae Asset Securities, described the move as the power of shareholder returns. He said SK Hynix's announcement of shareholder returns totaling more than 40 trillion won, followed by expectations for a special dividend of more than 100 trillion won at Samsung Electronics, boosted related shares.

Institutional investors were net buyers of 248.4 billion won on the main bourse. Foreign and retail investors were net sellers of 171.1 billion won and 1.1655 trillion won, respectively. By sector, insurance jumped 6.55%, telecoms rose 3.38%, distribution gained 2.72% and electrical and electronics added 1.96%. Medical and precision equipment fell 5.42%, construction dropped 5.36%, metals lost 4.05%, machinery and equipment slid 3.85%, and transport equipment and parts declined 3.08%.

Moves among the largest companies by market value were mixed. Samsung Electronics climbed 10,500 won, or 3.87%, to 281,500 won, while SK Hynix rose 39,000 won, or 2.31%, to 1.73 million won. Samsung Life Insurance gained 10.61%, Samsung C&T added 5.75%, Shinhan Financial Group rose 2.97% and KB Financial Group advanced 2.69%. Hanwha Aerospace fell 7.03%, Samsung Electro-Mechanics lost 5.73%, HD Hyundai Heavy Industries dropped 4.73% and LG Energy Solution slid 4.05%.

The Kosdaq Index closed down 38.95 points, or 4.63%, at 801.94. Losses widened during the session, triggering a sell-side sidecar, or a temporary halt to program sell orders. Most of the market's heavyweight stocks declined. Alteogen fell 5.74%, while EcoPro and EcoPro BM each dropped more than 7%.

Rainbow Robotics, Jusung Engineering, Wonik IPS, HLB, LEENO Industrial, EO Technics, ABL Bio, Peptron, PharmaResearch and Samchundang Pharm also fell, with losses ranging from the 2% range to the 8% range.

The three main U.S. stock indexes all closed lower on Aug. 20 as long-term Treasury yields resumed climbing, oil prices rose and Walmart Inc.'s earnings fueled concern over slowing consumer spending. The Dow Jones Industrial Average fell 703.84 points, or 1.32%, to 52,759.21.

The S&P 500 dropped 66.82 points, or 0.87%, to 7,641.16, while the Nasdaq Composite fell 263.92 points, or 1.00%, to 26,067.17. Walmart posted its weakest growth in U.S. same-store sales in six years for the second quarter, and its shares tumbled 9.15%, deepening concerns about softer consumption.

Semiconductor shares bucked the broader Wall Street decline, rebounding on bargain hunting. The Philadelphia Semiconductor Index rose 61.79 points, or 0.53%, to 11,800.02. Micron Technology Inc. surged 3.97% to $974.33, while SK Hynix's ADR gained 4.43% to $163.08. Advanced Micro Devices Inc. and Broadcom Inc. rose 0.65% and 0.43%, respectively, while Nvidia Corp. fell 0.33% and Intel Corp. slipped 0.72%.

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