South Korean stocks rapidly erased losses Wednesday as local retail investors bought into a wave of selling by foreign funds.
The Kospi rose 0.3%, reversing an early decline of as much as 3.2%. Samsung Electronics Co. pared most of its drop, after briefly plunging as much as 6.1% on its failure to reach a wage agreement with its biggest labor union.
Samsung peer SK Hynix Inc. reversed an early loss, shaking off investor concerns of overheating that dragged down AI-related stocks in New York on Tuesday. The Korean memory makers’ shares are up more than 100% each so far in 2026.
“For Korean equities, the problem is concentration — this market is a two-stock story,” said Dilin Wu, a research strategist covering cross-asset markets at Pepperstone Group Ltd. “The AI hardware thesis that drove the Kospi’s record run is still intact — but execution risk on the supply side is now sitting right next to it, and that’s a harder position to hold with conviction.”
Foreign funds have sold more than $45 billion worth of Kospi stocks so far this year. Buying by local institutional and retail investors has compensated, with the index’s 82% year-to-date gain the best in the world.
“We see further upside for the Kospi thanks to structural stories including reform,” Morgan Stanley analysts including Joon Seok wrote in a report Wednesday, raising their 12-month Kospi target to 8,500 from 6,500. While there are external uncertainties such as the ripple effects from the Middle East situation, “the Kospi should be resilient.”
This article was generated from an automated news agency feed without modifications to text.
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