Kospi claws back up 3.26 percent in volatile trading on bargain hunting

Korean stocks rebounded more than 3 percent Wednesday as investors snapped up major semiconductor shares following one of the market's steepest declines on record in the previous session. The local currency weakened against the U.S. dollar.

After choppy trading, the benchmark Kospi gained 267.18 points, or 3.26 percent, to close at 8,471.02.

The Kospi, which had opened higher, briefly fell into negative territory on heavy foreign selling and dropped close to the 8,000-point level before reversing course on strong buying by retail and institutional investors.

Trade volume was heavy at 413.4 million shares worth 53.78 trillion won ($34.81 billion), with gainers outnumbering losers 514 to 366.

Foreign investors sold a net 4.66 trillion won. Meanwhile, retail and institutional investors were net buyers, purchasing 2.63 trillion and 1.92 trillion won, respectively.

Overnight, Wall Street closed lower as sharp declines in memory chip and semiconductor stocks weighed on investor sentiment amid broader concerns about the artificial intelligence sector.

"The Kospi turned higher on bargain hunting following the previous day's steep decline," Lee Kyung-min, an analyst at Daeshin Securities, said.

However, Lee said investor caution persisted ahead of Micron Technology's earnings announcement and the release of the U.S. personal consumption expenditures, or PCE, price index for May.

In Seoul, large-cap shares ended mixed.

Chipmakers Samsung Electronics and SK hynix went up 9.84 percent to 340,500 won and 0.98 percent to 2.58 million won, respectively.

SK Square, the parent of SK hynix, went down 1.8 percent to 1.79 million won.

Samsung Electro-Mechanics, an electronic components manufacturing affiliate of Samsung Electronics, shed 1.31 percent to 1.96 million won.

Top carmaker Hyundai Motor decreased 0.39 percent to 509,000 won, while leading battery maker LG Energy Solution gained 0.97 percent to 365,500 won.

The won weakened by 2.7 won from the previous session to trade at 1,541.8 won per dollar as of 3:30 p.m.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys added 0.2 basis points to 3.77 percent, and the return on the benchmark five-year government bonds fell 0.2 basis points to 4.01 percent.

Yonhap