South Korean stock market rebounds as retail investors buy against the trend after foreign investors sell off

Glonghui, May 13th｜On Wednesday, the South Korean stock market quickly recovered lost ground as local retail investors bought stocks amid a wave of foreign fund sell-offs. The KOSPI index rose by more than 1%, reversing a loss that had reached as much as 3.2% earlier in the session. Samsung Electronics saw its share price plunge by as much as 6.1% after failing to reach a wage agreement with its largest labor union, but the decline later narrowed. Samsung’s rival, SK Hynix, reversed its early losses, as investor concerns about overheating in artificial intelligence-related stocks eased. So far in 2024, shares of this South Korean memory chip manufacturer have surged by more than 100%. “For the Korean stock market, the issue is concentration—the market is essentially dominated by two stocks,” said Dilin Wu, a cross-asset research strategist at Pepperstone Group. “The narrative of AI hardware driving the KOSPI to record highs still holds, but now there are also execution risks on the supply side, making it more difficult for investors to maintain their conviction in this view.”