KOSPI Recovers on Semiconductor Shareholder Return Hopes

South Korea's KOSPI index closed higher at 6912.95 on August 21, 2026, reversing early losses and extending its previous day's gains. The rebound was largely attributed to growing optimism surrounding enhanced shareholder return policies from leading semiconductor firms, SK Hynix and Samsung Electronics.

SK Hynix's recent announcement of a substantial share buyback and incineration plan has fueled expectations for similar measures from Samsung Electronics, which is expected to unveil its own shareholder return strategy later this month. These anticipated moves have boosted investor confidence, helping the KOSPI overcome the pressure from rising U.S. Treasury yields. Both Samsung Electronics and SK Hynix saw their stock prices climb by 3.87% and 2.31%, respectively, by the market close.

In contrast to the KOSPI's recovery, the KOSDAQ market suffered a significant downturn, closing down 4.63% at 801.94. The index experienced a sharp decline shortly after opening, triggering a "sell-side car", a trading halt mechanism designed to curb excessive price drops. This marks the 32nd instance of a trading halt this year and the 14th "sell-side car" activation on the KOSDAQ.

The foreign exchange market also saw movement, with the won-dollar exchange rate closing at 1386.5 won per dollar, down 6.1 won from the previous session. This marks the first time the rate has fallen below 1390 won since September 18, 2025, and is the lowest since September 17, 2025. The decline is attributed to expectations that the U.S. Federal Reserve will not raise interest rates next month, coupled with increased dollar selling by exporters.