The KOSPI barely held the 7,000 level and ended slightly lower. Although international oil prices and U.S. Government Bonds yields rose as the Middle East conflict persisted, investor sentiment toward domestic stocks did not appear to be significantly dampened on expectations that a super-boom in the global memory industry will continue.
Foreign investors posted large net sales on the main bourse, but massive inflows of household funds defended the lower end of the index as share buybacks by Samsung Electronics and SK hynix continued on a large scale. Pension funds were net sellers, but institutions were net buyers as net inflows came through exchange-traded funds (ETF).
On the 10th, the KOSPI closed at 7,033.92, down 17.72 points, or 0.25%, from the previous trading day. After a slightly weak open, the KOSPI attempted an early rebound but soon turned lower. In the morning, the decline widened to over 2% at one point, briefly breaking below 6,900. But the index trimmed losses in the afternoon to defend 7,000.
Kang Jin-hyeok, an analyst at Shinhan Investment & Securities, said, "On quadruple witching day, with the KRX sector index's periodic changes, ETF rebalancing flows moved sharply, confirming a short-term bottom for the index."
It was "quadruple witching day," when expirations for four derivatives—index futures and options, and single-stock futures and options—coincide. As expiring futures and options positions are unwound and new contracts are initiated, price swings tend to widen.
Risk appetite for assets such as stocks in global markets was somewhat subdued. Tensions between the United States and Iran are intensifying in the Middle East.
In the Strait of Hormuz, the United States and Iran, and in the Red Sea, Saudi Arabia and the pro-Iran armed group Houthis are engaged in simultaneous military clashes. The Red Sea had served as an alternative oil-shipping route to the blocked Strait of Hormuz, but with that route also constrained, international oil prices surged. Brent crude topped $100 a barrel.
U.S. Government Bonds yields also rose. The U.S. Treasury announced a buyback program to respond to recent rate increases, but its size—up to $600 million—fell short of market expectations ($800 million to $1 billion). The 10-year U.S. Treasury yield jumped to 4.85%, hitting a record high in three years.
As a result, foreign investors alone recorded net sales of more than 2.7 trillion won on the main bourse. KOSPI 200 futures also saw selling dominance. However, declines were limited in heavyweights such as Samsung Electronics and SK hynix. Some financials, defense, and refiners were strong.
After opening lower, the KOSDAQ rebounded to finish higher. The KOSDAQ closed up 6.55 points, or 0.79%, at 836.92. Semiconductor-related stocks were strong. Jusung Engineering(036930) surged, pushing its market capitalization above 10 trillion won, and FADU(440110) also rose more than 6%.