SK Hynix's 40 Trillion Won Shareholder Return Plan Sparks 8% Rally, KOSPI Recovers 6700 Level

South Korea's KOSPI index surged past the 6700-point mark on Tuesday, driven largely by a monumental shareholder return announcement from semiconductor giant SK Hynix. The company's decision to repurchase and cancel approximately 40 trillion won ($29 billion) worth of its own shares sent its stock soaring and boosted market sentiment.

SK Hynix's announcement detailed plans to acquire 24.07 million common shares through open market purchases and subsequently cancel them entirely. This move represents the largest share buyback and cancellation by a South Korean listed company to date. Furthermore, the company pledged to return at least 50% of its cumulative free cash flow between 2025 and 2027 to shareholders, signaling a strong commitment to rewarding investors.

Following the news, SK Hynix shares climbed over 8% in early trading, reclaiming the 1.6 million won price level. Competitor Samsung Electronics also saw a significant boost, rising 4.44%. The positive impact extended to the broader KOSPI market, with many top-tier stocks experiencing gains. The KOSPI itself rose 4.03% to 6732.00 points in morning trade, with individual investors showing strong buying interest.

Meanwhile, the KOSDAQ index also saw gains, climbing 1.50% to 836.84. The biotech sector, in particular, showed strength, mirroring positive movements in the US market driven by news of a successful mRNA cancer vaccine trial. The US stock market had seen a slight rise, buoyed by expectations of decreased Treasury yields following the US Treasury's announcement of long-term bond purchases. However, the Philadelphia Semiconductor Index dipped over 2% due to new regulations on data center construction in Pennsylvania.