Kospi Holds 7,000 Despite Quadruple Witching, Semiconductor Rebalancing

Chip Materials, Parts and Equipment Stocks Including TSE Surge

Samsung, SK Hynix Buybacks Help Limit Losses

South Korea’s benchmark stock index held above the 7,000 level on Sept. 10 despite expectations of sharp swings as so-called quadruple witching coincided with large-scale ETF rebalancing. The Kosdaq ended higher as some semiconductor materials, parts and equipment makers, including Jusung Engineering and TSE, posted sharp gains.

The Kospi fell 0.25% to close at 7,033.92 on Sept. 10. The index dropped as low as 6,898.45 during the session but pared losses in the afternoon to finish above 7,000. Foreign investors were net sellers of 2.7504 trillion won ($2.02 billion), while retail investors were net buyers of 1.0931 trillion won ($803 million) and institutions bought a net 3.6 billion won ($2.6 million). Other corporations were net buyers of 1.6496 trillion won ($1.21 billion). Retail investors turned net buyers for the first time in six trading days, while institutions logged a sixth straight session of net buying.

Among the market’s biggest companies, Samsung Electronics fell 0.19% and SK Hynix slipped 0.16%. Both stocks recovered most of their intraday losses after falling more than 2% earlier in the session.

Brokerages had expected steeper declines in Samsung Electronics and SK Hynix on Sept. 10 because futures and options expiration, known as quadruple witching, overlapped with large ETF rebalancing ahead of a regular revision to KRX sector indexes. In the KRX Semiconductor Index, SK Hynix’s weighting had risen to the 36% range, while Samsung Electronics’ had climbed to the 22% range. Because the regular review caps each constituent’s weighting at 20%, the process of reducing those stakes was expected to trigger large mechanical selling. Buybacks by Samsung Electronics and SK Hynix, however, helped other corporations support the market’s lower bound.

Oil refining and shipping stocks also helped defend the index. As geopolitical tensions in the Middle East intensified and Brent crude rose above $100 a barrel, buying concentrated in Korea Petroleum Co., which gained 10.30%, and Heung-A Shipping, which climbed 8.01%.

The Kosdaq rose 0.79% from the previous session to close at 836.92. The advance was driven by sharp gains in semiconductor materials, parts and equipment stocks centered on Jusung Engineering and TSE, whose weightings increased in the KRX Semiconductor Index. Jusung Engineering jumped 7.02% and TSE surged 14.15%. TES, newly added to the index on Sept. 10, also edged up 0.39%. Among large-cap Kosdaq stocks, EcoPro BM rose 3.31%, Simmtech gained 0.98% and Fadu advanced 6.59%, contributing to the index’s rise. By contrast, other materials, parts and equipment names including Wonik IPS, down 1.08%, and EO Technics, off 3.19%, fell.

Oh Hyun-ah, Hankyung.com reporter 5hyun@hankyung.com