KOSPI Reverses Steep Losses, Recovers 7700 Mark on Semiconductor Strength

South Korea's KOSPI index staged a remarkable comeback on July 3, recovering from a sharp intraday decline to trade in positive territory. The benchmark index had plunged nearly 4% earlier in the session, dipping below the 7400 mark, before reversing course to reclaim the 7700 level.

Leading the charge were semiconductor giants Samsung Electronics and SK Hynix, whose shares saw significant gains. Samsung Electronics was up 5.94%, while SK Hynix climbed 4.48%. Their performance provided a crucial boost to the KOSPI's recovery. Institutional investors played a key role, purchasing approximately 1.71 trillion won (US$1.2 billion) worth of stocks, offsetting a substantial net sale of 1.38 trillion won by foreign investors.

The market's earlier slump was attributed to a ripple effect from the U.S. stock market, where major semiconductor companies experienced a two-day sell-off. Micron Technology, for instance, fell over 10% on July 1 and continued to slide 5.49% on July 2. Nvidia and Lam Research also saw notable drops. The Philadelphia Semiconductor Index, closely watched for its correlation with the Korean semiconductor sector, had fallen 5.45%.

In contrast, the KOSDAQ index continued to struggle, trading down 3.12% at 839.72. Biotech stocks such as Alteogen and ABL Bio, along with secondary battery companies like Ecopro BM and Ecopro, also exhibited weakness, reflecting broader market concerns beyond the semiconductor sector.