Kospi rebounds sharply as institutions step in

Stocks ended higher Monday, supported by institutional buying, as investors weighed concerns over whether heavy spending on AI infrastructure would generate sufficient returns.

The won was trading higher against the dollar.

After opening 3.17 percent lower, the Kospi reversed course to close up 99.96 points, or 1.76 percent, to 5,768.01, after falling as low as 5,488.41.

Institutions bought a net 574.66 billion won ($432 million) worth of shares, while foreign investors and retail investors sold a net 37.87 billion won and 1.09 trillion won, respectively.

Investors also remained cautious ahead of earnings reports due this week from major companies, including Tesla and Meta Platforms, as well as the Nov. 3 U.S. midterm elections, amid continued uncertainty over the outlook for interest rates, analysts said.

"Some investors appear to have bought large-cap stocks in search of bargains following sharp declines in recent weeks, helping the index move into positive territory despite reservations centered on massive spending on AI infrastructure," IBK Securities said.

In Seoul, tech stocks contributed to the gains.

Samsung Electronics rose 1.16 percent to 218,000 won, while its chipmaking rival SK hynix climbed 0.39 percent to 1.28 million won.

Carmaker Hyundai Motor jumped 4.49 percent to 326,000 won, and defense company Hanwha Aerospace advanced 1.91 percent to 905,000 won.

Meanwhile, shipbuilder HD Hyundai Heavy Industries fell 1.71 percent to 345,500 won, and Hanwha Ocean declined 1.23 percent to 64,200 won.

The local currency rose 1.1 won from the previous session to trade at 1,330.3 against the greenback at 3:30 p.m.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 2.3 basis points to 3.877, and the return on the benchmark five-year government bonds climbed 2.6 points to 4.014.

Yonhap