On Wednesday (June 24), South Korean stocks rebounded sharply after a nearly 10% plunge the previous day, with the benchmark Kospi rising as much as 4.2% at one point.
Many industry insiders believe Tuesday’s sell-off was driven by technical factors, and investors are now refocusing on chipmakers’ earnings.
June 24 News: On Wednesday (June 24), South Korean stocks rebounded sharply after a nearly 10% plunge the previous day, with the benchmark Kospi rising as much as 4.2% at one point. Many industry insiders believe Tuesday’s sell-off was driven by technical factors, and investors are now refocusing on chipmakers’ earnings.
Among heavyweight stocks, Samsung Electronics led the gains, rebounding by nearly 10% at one point. Earlier, media reports citing industry sources said Samsung Electronics is preparing to repurchase about 90 trillion won worth of shares to pay employee bonuses, with details possibly announced soon. Samsung is expected to distribute about 93 trillion won worth of company stock to employees after tax.
Meanwhile, SK Hynix shares also rose more than 5% during the session. In terms of fund flows, foreign investors continued to sell South Korean stocks in early trading, while South Korean retail investors added to their positions.
On Tuesday, as optimism over global artificial intelligence investment suddenly cooled, South Korean stocks suffered one of the most severe crashes in history, triggering a rapid unwinding of leveraged positions in what had been the world’s best-performing market.
However, many market observers believe this is only a brief pause after a sustained rally rather than the start of a long-term decline, and they expect strong earnings to continue driving share prices higher.
“The fundamentals of memory and peripheral AI stocks remain solid because their products are still a key bottleneck, even though the sustained rally has led to accumulated market fatigue,” Morgan Stanley analysts including Joon Seok wrote in a report. “We view this as a breather, not a breakdown.”
Currently, market focus is on the quarterly earnings report of U.S. chipmaker Micron Technology later this week, which will be a key test for chipmakers.
Regarding South Korea’s “memory duo,” Samsung is expected to release preliminary second-quarter earnings in early July. Citigroup analyst Peter Lee raised his forecast for Samsung’s operating profit, citing a favorable market environment and continued memory growth prospects.
In addition, MSCI announced on Tuesday local time that it will retain South Korea in its emerging markets index basket, a decision that was widely expected and did not have a major impact on the South Korean market.
A South Korean presidential aide also revealed during the day that Samsung Electronics and SK Hynix are in discussions with the South Korean government regarding next-stage investment and site selection.
Due to a surge in demand, SK Hynix and Samsung Electronics need to advance the construction schedule of their chip clusters by more than 10 years.
