SK hynix(000660) said the domestic stock market surged nearly 6% after releasing a massive share cancellation the previous day. The U.S. Treasury's announcement that it would expand the size of its Government Bonds buybacks also reduced external uncertainties and boosted investor sentiment.
On the 20th, the KOSPI ended the session at 6,852.58, up 5.89% (381.41 points) from the previous trading day. The KOSPI opened at 6,680.35, up 3.23% (209.17 points), and extended gains during the session. In the morning, a buy sidecar that temporarily halts program buy orders was triggered on the main board.
Foreign investors bought a large amount of shares on the main board. While individuals and institutions net sold 2.6442 trillion won and 665 billion won, respectively, foreigners net bought 2.3 trillion won.
Kim Giback, a researcher at Shinhan Investment & Securities, said, "After a steep drop the previous day, the domestic market rebounded led by SK hynix," adding, "a buy sidecar was triggered on the main board, and as the KOSPI approached the 120-day moving average, large caps rose except for defense and financials."
What lifted the KOSPI was SK hynix's shareholder-return catalyst. Lee Kyung-min, a researcher at Daishin Securities, said, "As profit-taking pressure recently increased, semiconductors led the weakness, but the previous day SK hynix released a 40 trillion won share buyback and cancellation plan, reversing investor sentiment."
Expectations for additional shareholder returns are also high. Earlier, SK hynix said it would conduct shareholder returns within 50% of cumulative free cash flow (FCF) for 2025–2027. But it raised the shareholder-return ratio to "more than 50%." On top of that, reports said Samsung Electronics will approve a shareholder-return policy in the 100 trillion won range this month.
The researcher said, "Expectations for large-scale shareholder returns acted as a positive for semiconductor stocks and the broader domestic market."
SK hynix and SK Square(402340) each rose more than 12% and 11%. Samsung Electronics(005930) also closed up about 9%.
External uncertainties also eased. Overnight, the U.S. Treasury said it would double the size of its buybacks to at least $4 billion per operation from $2 billion to improve liquidity in long-term Government Bonds. A buyback means repurchasing existing Government Bonds traded in the market. The decision partly eased supply-demand pressure in long-dated notes, and U.S. long-term Government Bonds yields fell.
The KOSDAQ market also rose for the first time in a while. The KOSDAQ index ended the session at 840.89, up 1.99% (16.43 points) from the previous day.
In the KOSDAQ market, while individuals and foreigners net sold 9.5 billion won and 123.3 billion won, respectively, institutions alone bought 120.8 billion won.
The KOSDAQ index improved in investor sentiment as biotech stocks rebounded on news that Moderna's cancer vaccine succeeded in phase 3 clinical trials. Alteogen, the largest stock by market capitalization on the KOSDAQ, rose more than 11%.