Foreign Investors Fuel 17% Surge in South Korean Stocks After Plunge; Market Likened to 'Gambling Den'

South Korea's stock market staged a remarkable comeback on Tuesday, with the KOSPI index soaring by over 17% in a single day. This dramatic rebound followed three consecutive days of steep declines, as foreign investors injected significant capital into the market. The KOSPI opened higher and continued its ascent, surpassing the 6000-point mark. By mid-afternoon, it had reached 6561.33, a gain of 17.29% for the day. If this level holds, it would mark the highest single-day percentage increase in the KOSPI's history, surpassing the previous record of 11.95% set on October 30, 2008.

The surge was primarily fueled by foreign investors, who net purchased over 7 trillion won (approximately $5.1 billion USD) in the stock market, absorbing significant sell-offs by individual investors. Institutional investors also shifted from net sellers to net buyers. Major tech stocks like Samsung Electronics and SK Hynix, which had seen substantial drops in previous days, led the rally with gains exceeding 20%. SK Square and Samsung Electro-Mechanics neared the daily upper limit of a 30% increase.

Analysts attribute the sharp rise to a combination of bargain hunting after the recent sell-off and the positive influence of a rally in semiconductor stocks on the New York Stock Exchange the previous day. The Philadelphia Semiconductor Index, a benchmark for major US semiconductor stocks, surged by 8.19%. This global strength in the tech sector appears to have spilled over into the South Korean market, boosting related companies.

The KOSDAQ market also experienced a significant jump, with the index rising over 11%. Both the KOSPI and KOSDAQ saw the activation of "buy sidecar" mechanisms, which temporarily halt program trading to curb excessive volatility. This rapid fluctuation between sharp declines and surges has created an atmosphere of anxiety among investors, with the market's unpredictable nature being compared to a "gambling den."