Foreign Investors Return, KOSPI Jumps 2.66%

Today's Mood

KOSPI surged 2.66% to close at 6,894.23, and KOSDAQ rose 0.60% to 827.12. Both indexes opened higher and extended gains through the session, tracking an overnight rally on Wall Street.

KOSPI briefly touched the 6,900 level intraday but could not hold above it. Even so, the day’s 178.82-point gain ranks among the index’s larger single-day moves recently.

Checking Yesterday's Call

Yesterday we said we’d watch three things: whether foreign selling extended to an eighth straight session, whether shipbuilding and defense stayed strong, and whether Sphere and Sungho Electronics kept climbing.

The results split. Foreign investors did not sell for an eighth session — they net-bought 973.3 billion won, ending a seven-session selling streak. HD Hyundai Heavy Industries and Hanwha Aerospace, which had jumped more than 5% and 3% yesterday, gave back some of those gains, falling 2.02% and 0.73% today. Sungho Electronics, on the other hand, rose another 19.37% for a second straight double-digit day, while Sphere’s gain had shrunk to just 0.42% by midday.

Two of three calls went the other way, and only one held. The reversal itself wasn’t bad news, though — the end of foreign selling was the single biggest driver of today’s rally.

Wall Street's Rebound Set the Tone

The Nasdaq rose 1.69%, the S&P 500 1.14%, and the Dow 0.61% in the prior session, as markets shook off the hawkish FOMC shock within a day. The VIX fear gauge dropped 12.82% to 15.44.

The US 10-year Treasury yield fell 1.18% to 4.95%. The Philadelphia Semiconductor Index jumped 3.1%, with Micron up 5.50% and Nvidia up 2.54%, and that chip-led rebound carried straight through to KOSPI.

Foreign Investors Came Back

Foreign investors net-bought 973.3 billion won on KOSPI, and institutions added 1.7168 trillion won, while retail investors sold 4.3719 trillion won.

Foreign investors had sold on KOSPI for seven straight sessions through yesterday. That streak breaking is the key ingredient behind today’s rally — a different picture from the recent pattern of foreign selling even on up days.

Big Chipmakers Led the Index

Samsung Electronics rose 1.56% to 260,000 won, and SK Hynix rose 4.59% to 1,847,000 won. Hanmi Semiconductor gained 2.85% and Samsung Electro-Mechanics 2.52%.

All four extended overnight strength in US chip stocks. SK Hynix alone accounted for a large share of KOSPI’s 178.82-point gain.

Photo: DrHughManning / Wikimedia Commons (BY-SA 4.0)

Chips Also Look Cheap on Valuation

Samsung Electronics trades at 3.7x forward earnings, SK Hynix at 4.0x. Against average analyst target prices, today’s close is 82.3% below target for Samsung and 71.5% below for SK Hynix, based on 36 and 37 analyst estimates respectively.

For beginners: forward P/E divides the current price by next year’s expected earnings. A lower number suggests the stock is cheap relative to expected profit, but that estimate itself can be wrong.

In June, Daol Investment analyst Ko Young-min raised Samsung’s target price to 585,000 won, calling any pullback “a buying opportunity, not a reason to worry.” Against that target, today’s close is still less than half. But both stocks also trade 30.3% and 37.8% below their 52-week highs — meaning it’s the share price that has fallen sharply, not the target that has come down.

Cable and Optics Stocks Went Vertical

Gaon Cable jumped 25.38% to 331,000 won, Sungho Electronics 19.37% to 26,500 won, Daehan Fiberoptics 13.05% to 18,370 won, and Taihan Electric Wire 11.32% to 31,950 won. Four of the six most heavily traded names today were cable or optics stocks.

The driver is power demand from AI data centers. Global grid supply is projected to fall 268 gigawatts short of demand by 2030. Gaon Cable’s North American busduct sales for AI data centers were already forecast to grow from roughly 80 billion won last year to 320 billion won this year and 800 billion won next year — a theme that has repeatedly lifted these stocks this month.

Sungho Electronics Rallied a Second Day

Sungho Electronics rose 14.67% yesterday and another 19.37% today — up more than a third over two sessions.

The company acquired optical-transceiver alignment equipment maker ADS Tech late last year; ADS Tech supplies Nvidia subsidiary Mellanox. We found no fresh news explaining today’s specific jump — it looks like the same story re-surfacing amid broad strength in cable and optics names.

Financials Took a Breather

Yesterday’s financial-stock leaders reversed today. Shinhan Financial Group fell 3.07% to 110,600 won, and KB Financial Group fell 2.50% to 175,200 won.

Money appears to have rotated into chips and cable stocks. Financials still look cheap on valuation — Shinhan trades at 8.0x forward earnings and KB at 8.7x, higher than chips but below the broader market.

Bond Yields and the Won Also Steadied

The won weakened 0.32% to 1,385.40 per dollar. Korea’s 10-year government bond yield fell 0.04 percentage point to 4.466%, moving in step with the drop in US yields.

91-day CD stayed flat at 3.2%, while 3-month KORIBOR rose 0.02 point to 3.32%.

KOSDAQ and Seasonality

KOSDAQ’s 0.60% gain lagged KOSPI’s. With buying concentrated in large-cap chips and cable stocks, the small-cap-heavy KOSDAQ had a comparatively quiet day.

Seasonally, September has averaged a 0.43% KOSPI gain over the past 20 years, rising 65% of the time. Whether today’s jump fits that pattern, the rest of the month will tell.

What We're Watching Next Session

First, whether foreign net buying continues next session. One day of data can’t tell us whether this is a reversal or a one-off bounce.

Second, whether trading value in cable and optics names holds up. Stocks that jumped more than 25%, like Gaon Cable, often see profit-taking the next day.

Third, whether Wall Street extends today’s rebound. If chips stumble again, today’s KOSPI gain could be given back.

Fourth, whether the pullback in financials continues or was just a one-day pause.

Worth a Closer Look

Samsung Electronics and SK Hynix trade at 3.7x and 4.0x forward earnings. Against average target prices from 36 and 37 analysts, today’s close is 82.3% and 71.5% below target respectively.

In June, Daol Investment analyst Ko Young-min raised Samsung’s target 30% to 585,000 won from 450,000 won, citing long-term supply agreements settling at prices above competitors’ and HBM4 shipments ramping from the third quarter with firmer average selling prices than expected.

That gap isn’t just about low targets, though. Both stocks also trade 30.3% and 37.8% below their 52-week highs — targets haven’t moved much since June, but the share prices fell sharply in between, and today reversed part of that gap.

Gaon Cable, Taihan Electric Wire, Daehan Fiberoptics and Sungho Electronics all ranked among today’s most heavily traded names. The common thread is power demand from AI data centers.

Global data center power demand is projected to reach 161 gigawatts in 2026, up 31% year over year on cloud capex, but grid buildout of high-voltage transformers and switchgear can’t keep pace — leaving a projected 268-gigawatt supply gap by 2030.

Gaon Cable has been a poster child for this theme: its North American busduct sales for AI data centers were already forecast to grow from about 80 billion won last year to 320 billion this year and 800 billion next year. Today’s simultaneous move in Taihan Electric Wire and Daehan Fiberoptics suggests the theme is broadening beyond a single stock.