Stocks spike nearly 6% on chip buyback bets, eased U.S. bond yield concerns
Shares rebounded sharply as SK hynix unveiled a major buyback plan and investors anticipated stronger Samsung Electronics shareholder returns.
A digital board inside Hana Bank in central Seoul shows the figures of the Korean stocks on Aug. 20.
YONHAP
Shares soared nearly 6 percent Thursday as investors bet on stronger shareholder returns from chip giants Samsung Electronics and SK hynix, and eased U.S. bond market concerns. The won fell against the dollar, as a result.
The benchmark Kospi rose 381.41 points, or 5.89 percent, to end at 6,852.58, after rising as high as 6,904.55.
The index plunged nearly 6 percent the previous session on a tech sell-off but recovered the losses after SK hynix announced a 40 trillion won ($28.7 billion) share buyback plan, while speculation grew over Samsung Electronics' shareholder return policy announcement later this month.
Program trading for the Kospi-listed shares was suspended for five minutes at around 10 a.m., as the Korea Exchange (KRX) activated a buy-side sidecar — a measure triggered when the Kospi 200 Futures Index rises 5 percent or more for at least one minute.
Overnight, Wall Street's major indexes closed higher as U.S. Treasury yields retreated after the U.S. Department of the Treasury announced plans to significantly increase buybacks of longer-term government debts.
The yield on the 30-year Treasury bond, which had climbed to its highest level since 2007, fell Wednesday, along with the benchmark 10-year Treasury yield.
Trade volume was moderate at 301.74 million shares worth 28.07 trillion won, with advancers outnumbering decliners 518 to 338.
Foreigners and institutions bought a net 1.71 trillion won and 487.37 billion won, respectively, while individuals sold a net 2.28 trillion won.
"Investors returned to buying amid eased concerns over rising U.S. Treasury yields, while SK hynix's shareholder return plan further boosted market sentiment," Kim Ki-baek, an analyst at Shinhan Securities, said.
Market bellwether Samsung Electronics surged 9.49 percent to 271,000 won, and its chipmaking rival SK hynix jumped 12.73 percent to 1.69 million won.
SK Square, the parent company of SK hynix, advanced 11.85 percent to 1.12 million won, while Samsung Electro-Mechanics, an electronics component affiliate of Samsung Electronics, gained 0.65 percent to 1.39 million won.
The local currency strengthened 5.1 won from the previous trading session to trade at 1,392.6 against the greenback at 3:30 p.m.
Yonhap
