Kospi Surges 5 Percent in Early Trade as Chip Stocks Rally in Seoul

Updated 10:43 UTC: The rally held in the later market wire snapshot. South Korea's Kospi stood at 5,239.13, up 3.55 percent from 5,059.69, and Taiwan's Taiex stood at 42,711.92, up 2.52 percent from 41,661.70. The same snapshot put the S&P 500 fund SPY at 752.69, up 2.69 percent, the Nasdaq 100 fund QQQ at 679.35, up 4.99 percent, and the Dow Jones fund DIA at 523.33, up 1.76 percent. The euro rose 0.71 percent to 1.1226 dollars. Reuters reported that Asian stocks rose on Tuesday as oil fell after President Donald Trump said he plans to hold off on new military strikes against Iran, and that investors now wait for the United States inflation report due later on Tuesday. Economists polled by Reuters expect consumer prices to have risen 0.3 percent in October. Dow Jones Newswires, via Morningstar, also reported that oil fell and Asian equities rose on Tuesday after the president's comments on the Iran war boosted optimism.

South Korea's Kospi surged in early trade on Tuesday, Nov. 10. The index opened at 5,247.22, up 228.37 points or 4.55 percent from the previous session, Yonhap reported via Korea JoongAng Daily. By 9:15 a.m. in Seoul the Kospi had gained 275.50 points, or 5.49 percent, to 5,294.35. MoneyToday put the index at 5,276.06 at 9:12 a.m., up 257.06 points or 5.12 percent. These are early session levels. The market had not closed, and the figures do not describe a closing result.

The rise was fast enough to trigger a trading curb. The Korea Exchange activated a buy sidecar on the Kospi at 9:06 a.m., suspending program trading for five minutes, Yonhap reported. A buy sidecar is triggered when Kospi 200 futures rise 5 percent or more for at least one minute. Kospi 200 futures stood at 821.04 at activation, up 5.76 percent. Yonhap called it the 28th buy sidecar this year. Seoul Economic Daily said the Kospi sidecar was the first in nine sessions.

Chip stocks lead the move

Samsung Electronics and SK hynix led the board. As of 9:01 a.m., Samsung Electronics traded at 199,400 won, up 5.00 percent, and SK hynix traded at 1,216,000 won, up 7.04 percent, Seoul Economic Daily reported. The Kosdaq also rose. It opened at 661.73, up 22.76 points or 3.56 percent, and extended its gain to more than 4 percent. A buy sidecar was also triggered on the Kosdaq at about 9:10 a.m., the first in 17 trading sessions, according to Seoul Economic Daily.

The Korean won was quoted at 1,345.85 won against the U.S. dollar as of 9:15 a.m., down 1.55 won from the previous session's close, Yonhap reported.

Han Ji-young, an analyst at Kiwoom Securities, said before the open: "Korean shares are expected to rebound today, supported by upside factors such as the more than 5% surge in KOSPI 200 night futures," Seoul Economic Daily reported.

Wall Street and oil set the tone

Both Yonhap and Seoul Economic Daily pointed to the same drivers: gains on Wall Street on Monday, Nov. 9, hopes for diplomatic talks to end the Iran war after President Trump said he is not prepared to resume the bombardment, a drop in oil prices that calmed inflation fears, and bargain hunting in semiconductor stocks after steep recent losses.

On Wall Street on Monday, the Dow Jones Industrial Average rose 2.15 percent, the S&P 500 gained 2.35 percent and the Nasdaq Composite advanced 2.74 percent, Yonhap reported. Chip stocks split. AMD jumped 13.26 percent, Broadcom rose 8.78 percent and Micron rose 6.25 percent, while Nvidia fell about 4.2 percent, with Seoul Economic Daily putting Nvidia's fall at 4.27 percent. The PHLX semiconductor index jumped 6.85 percent.

Japan moved with Seoul. The Nikkei 225 rose 2.8 percent in early trade, led by bank and machinery stocks, Dow Jones Newswires reported via TradingView. Mizuho Financial Group rose 3.7 percent and Mitsubishi Heavy Industries rose 4.0 percent. The dollar stood at 158.02 yen.

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