Seoul's chipmakers fade from 5% highs as the KOSPI gives back a 2% rally
Samsung and SK hynix soared in the morning, then gave almost all of it back. The KOSPI closed down 0.81% at 5,018.85 as foreign and retail selling overwhelmed a bargain-hunting rally — and the driver was the Nvidia probe.
The News
Seoul's stock market opened Monday like a market ready to forgive last week. The KOSPI — South Korea's main stock index, like the S&P 500 for the US — rallied more than 2% intraday as bargain hunters stepped in after last week's rout, the sharp sell-off that hit chip stocks around the world. By the close, almost all of it was gone. The index finished at 5,018.85, down 40.84 points, or 0.81%, as foreign investors and retail traders — ordinary individual investors — sold into the morning strength and overwhelmed the rebound.
The two chip giants traced the same arc. Samsung climbed as high as ₩195,400 during the session but closed at ₩189,900, up just 0.64%. SK hynix rose as far as ₩1,193,000, a gain of 5.39%, before finishing at ₩1,136,000, up only 0.35%. Both stocks ended the day barely positive after looking like the leaders of a recovery a few hours earlier. The session's driver was the news from Nvidia — the board probe into chief executive Jensen Huang — plus US inflation data, the consumer and producer price indexes, due later this week.
One buyer kept showing up even as the market faded. 'Other corporations' — the trading category that captures company buybacks, when a company buys its own shares — net-bought ₩413.4 billion of SK hynix on the day, according to MoneyToday, a sign that SK hynix's own buyback programme was again cushioning the close. That flow did not stop the fade, but it helps explain why SK hynix finished positive on a day when the wider market fell. Three independent sources — Yonhap, Seoul Economic Daily and MoneyToday — agree on the closing figures used here.
SK hynix rose 5.39% in the morning — then closed up just 0.35%.
Why It Matters
A rally that gives back nearly everything by the close tells you more than the closing number alone. Monday's session shows that Seoul's investors are willing to buy chip stocks after a rout, but not willing to hold them through a headline they cannot price — and the Nvidia probe is exactly that kind of headline. Samsung and SK hynix sell the memory that goes into Nvidia's AI systems, so a question mark over Nvidia's chief executive is a question mark over their biggest customer's plans, even though South Korea's government said on Monday it expects no disruption to contracted GPU deliveries — Vice Minister of Science and ICT Ryu Jemyung told a parliamentary budget committee that contracted volumes should proceed without disruption, according to Reuters.
The buyback flow matters because it is the one buyer that does not flinch. When 'other corporations' net-buy ₩413.4 billion of SK hynix in a single session, that is the company's own programme putting a floor under the stock while foreign and retail investors sell. It cannot turn a down day into an up day on its own, but it is a real support — and with US inflation data due this week, Seoul's chipmakers are likely to keep trading on news from Washington as much as on anything happening in Korea.
Analyst's Take
Our call is Mixed. The morning rally proved the appetite to buy the dip is real — SK hynix up 5.39% intraday is not a market that has given up on memory. But the close proved the conviction is not: foreign and retail sellers took the rally as an exit, and both chip giants finished with only a fraction of their gains. Until the Nvidia probe produces facts instead of headlines, Seoul's chip stocks are likely to keep rallying in the morning and fading by the close.
What to watch: the US consumer and producer price data due this week, which could reset the rate outlook that has been whipsawing chip stocks; whether the buyback flow in SK hynix continues at Monday's scale; and any statement from Nvidia's board committee before its November 17 earnings. A clean read on inflation plus a quiet week for Nvidia would give Seoul room to hold a rally. Another probe headline would likely produce another fade.
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By The Numbers
FAQ
Why did Seoul rally and then fall in the same day?
Bargain hunters bought chip stocks in the morning after last week's rout, pushing the KOSPI up more than 2%. Then foreign investors and retail traders sold into the strength, and the index gave it all back to close down 0.81%.
What does 'other corporations' buying mean?
It is a trading category on the Korean exchange that captures buying by companies themselves — including buybacks, when a company buys its own shares. MoneyToday reported the category net-bought ₩413.4 billion of SK hynix on Monday, which points to buyback buying cushioning the close.
Why does a Nvidia board probe move Korean stocks?
Because Nvidia is the biggest customer for the high-bandwidth memory that Samsung and SK hynix make. A question over Nvidia's leadership raises questions about its investment and product plans, even though Seoul's government said Monday it expects no disruption to contracted GPU deliveries.
What data could move Seoul next?
US consumer and producer price inflation data due this week. Chip stocks have been swinging on the interest-rate outlook, so a hot or cool inflation print could set the tone for the next sessions.
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Source: Korea JoongAng Daily