South Korean shares opened higher Friday following Fed Governor Christopher Waller's signal of support for holding rates steady this month, easing rate hike concerns that had weighed on markets earlier this week. According to Reuters, the Kospi jumped 1.14% at Friday's open, rising 74.88 points to 6,650, extending a rebound after the sharp slide earlier this week tied to Middle East tensions. Waller made the remarks Thursday, saying he would be inclined to support a hold and backed keeping rates in the current 3.5 percent to 3.75 percent range at the Fed's September 15-16 meeting. The positive sentiment was reinforced by Treasury yields easing on the remarks, feeding into falling rate hike odds tracked on prediction markets this week.
The market recovery was primarily driven by corporate buybacks worth ₹1.68 lakh crore from other corporations, with most of the buying believed to be share buybacks by Samsung Electronics and SK Hynix. As reported by Bloomberg, government data showed Korea's August exports stayed solid on strong chip demand, extending the chip-driven rally that has supported the Kospi. SK Hynix finished at ₹1,693,000, up ₹19,000 (1.14%) from the previous day, while Samsung Electronics closed at ₹260,000, up ₹1,000 (0.38%). Among other gainers, Samsung C&T showed strong performance in the 3.7% range, SK gained 7.52%, and Shinhan Financial Group advanced 2.02%.
Despite the overall market gain, all three major entities recorded net selling, creating an unusual supply and demand pattern that restricted both the upper and lower bounds of the index. According to latest market data, individual investors sold ₹433.7 billion (about $316.47 million), driven by a strong desire to realize profits following the short-term rise from the previous day. Foreign investors maintained selling dominance with ₹153.5 billion in net outflows, while institutional investors expanded their selling volume to ₹274.8 billion, centered around financial investments and pension funds. However, large-scale net buying volume exceeding ₹1.6 trillion flowed in from other corporations, including share repurchases, firmly supporting the lower bound of the index. The broad-based selling pressure from foreign investors highlighted the challenges facing Korean markets amid global uncertainty, with the KOSDAQ index falling 1.56% to 821.25 points under combined selling by foreigners and institutions.
The technology sector led the market recovery with market breadth remaining positive, with 568 of the 907 traded stocks advancing while 304 declined. According to Reuters, battery maker LG Energy Solution jumped 5.47%, while Hyundai Motor and Kia gained 1.19% and 1.93% respectively. Steelmaker POSCO Holdings added 4.39%, contributing significantly to the market's strength. The technology rally was further supported by Broadcom forecasting strong artificial intelligence chip sales over the next two years, providing fresh evidence that demand from Big Tech for AI infrastructure remains robust. Healthcare stocks were weaker, with Samsung BioLogics falling 0.73%, while the South Korean won was quoted at 1,359.8 per dollar, down 0.04% from its previous close of 1,359.2.
The positive sentiment extended across Asian markets, with Japan's Nikkei 225 and Hong Kong's Hang Seng also opening higher, while South Korea's small-cap Kosdaq index advanced even more sharply. According to Reuters, Thursday's rally set the tone across US markets, with the Dow Jones Industrial Average gaining 1.18% for its best day since August 4, the S&P 500 adding 1.06%, and the Nasdaq Composite rising 1.4%. All three US indexes are on pace for a positive week, with traders now watching Friday's August nonfarm payrolls report that economists expect to show 53,000 jobs added compared with a loss of 23,000 jobs in July. As José Torres from Interactive Brokers noted, ongoing employment weakness should push the Fed toward easier policy, with the jobs data potentially reinforcing the dovish case or reviving rate hike concerns ahead of the Fed's September meeting.
