KOSPI jumps 2.24% to 5,859.08 points after strong institution-led rebound
Key Facts
The KOSPI ended the November 2 session up 128.34 points, or 2.24%, at 5,859.08 points, reversing course after opening down more than 1%, according to a Chosun Biz report. The index rose more than 3% during the session and topped 5,900 points before paring its gains by the close. The rebound followed a close at 5,730.74 points on October 30, recouping part of its earlier losses. Institutions led the buying wave with net purchases of 1.4735 trillion won, according to the same report. Demand for large-cap semiconductor stocks helped support the market, while Korean trade data provided a positive backdrop for exporters' shares.
Institutional flows were among the main drivers of the session's reversal, with pension funds buying 327.4 billion won and other companies recording net purchases of 537.7 billion won, according to Chosun Biz. Samsung Electronics shares rose 1.78%, and SK Hynix gained 3.81%, reversing the selling pressure seen at the open. By contrast, Intel's report had raised concerns about the technology sector's outlook, as the company's fourth-quarter revenue forecast fell short of market estimates. Chosun Biz said Intel shares fell nearly 30% in a single day after the forecast, reviving concerns about the sustainability of AI spending. Still, the KOSPI's performance showed that institutional buying and Korean chip stocks supported the recovery in the November 2 session.
On trade, South Korea's exports rose 93.7% year over year in October to $115.28 billion, the highest monthly value on record, according to data from the Ministry of Trade, Industry and Resources published by the government's policy website. Semiconductor exports surged 259% from a year earlier, while exports of other goods excluding chips rose 34%, indicating that export growth extended to other categories even as chips posted the largest increase. Reuters estimated semiconductor exports at $56.44 billion, up 259.4% year over year. The ministry attributed the surge to continued increases in prices and volumes as major technology companies continued investing in AI facilities. The figures highlight the importance of AI-related demand for South Korean exports, alongside gains in Samsung Electronics and SK Hynix shares during the session.
Trade strength was not matched by the pace of factory activity. The manufacturing purchasing managers' index stood at 51.3 in October, down from 53.9 in September and its lowest reading since February, according to an S&P Global survey cited by Reuters via Investing.com. The index remained above 50, the threshold separating expansion from contraction, for an eleventh consecutive month. Companies reported that slower demand, raw-material shortages and rising costs weighed on performance. Output growth was also the weakest of the year up to that point, according to the survey. The reading places slowing factory activity alongside the chip export boom, reflecting a divergence between strong external demand for electronic components and the broader course of industrial activity.
The trade surplus stood at $42.50 billion in October, down from September's record $49.97 billion, according to Reuters via MarketScreener. Total exports from January to October reached $930 billion. Trade, Industry and Resources Minister Kim Jung-kwan said that exports exceeding $110 billion in October made a total of $1 trillion for the year in November certain. The minister added that surpassing this level would make South Korea the fourth country to achieve annual exports above $1 trillion, after the United States, China and Germany. This places October's record data within an annual trajectory monitored by the government, despite the narrower trade surplus compared with the previous month.
Attention now turns to the October consumer price index, scheduled for publication on November 3, according to the schedule of South Korea's Ministry of Data and Statistics. The inflation release follows a strong rebound in stocks and trade figures showing a surge in chip exports, while October's reading showed slower growth in factory activity compared with September. The minister said annual exports reaching $1 trillion was now certain in November, with monthly exports continuing above $110 billion. The forthcoming price data will give investors a new indicator after a mix of strong trade and weakening manufacturing momentum. The open source did not establish a specific forecast for October's inflation rate.