Seoul shares make slight recovery after massive fall

An electronic board at a dealing room of the Hana Bank headquarters in Seoul shows Kospi closing at 2,302.8, Thursday. (Yonhap)

Korea’s benchmark stock index Kospi recovered to over 2,300 points on the back of bargain hunting on Friday, after experiencing a huge dip the day before.

The Kospi closed at 2,302.81, up 3.73 points from the previous day. Despite massive sell-offs by foreign investors, retail investors and institutions backed the index, net buying 100.5 billion won ($74.1 million) and 221.9 billion won, respectively. Foreign investors sold off 378.9 billion won.

The Kosdaq, Korea’s secondary bourse, closed at 748.49, up 4.64 points from the previous closing price.

"The Kospi, which closed at under 2,300 points on the previous day, returned to the threshold as retail investors and institutions moved in for bargain hunting,” said Choi Yoo-joon, an analyst at Shinhan Securities.

“The rebound was particularly higher in battery shares, which saw weak demand earlier due to concerns about earnings announcements slated for this week,” Choi said.

The dip on Thursday came as the US stock market plunged under the pressure of disappointing third-quarter results from big tech companies. Also, the US’ gross domestic product growing at an annual pace of 4.9 percent in the third quarter strengthened concerns that higher interest rates will continue. It was the first time for the Kospi to fall below 2,300 points since Jan. 6.

"It is hard to say whether the stock market will rebound soon. Volatility has escalated, and risks are still high. The market is at a stage where we have to watch out for economic slowdown rather than higher rates," Lee Woong-chan, analyst at Hi Investment & Securities, said.

On Friday, market bellwether Samsung Electronics closed at 67,300 won, up 0.9 percent from the day before. SK hynix, the country's No. 2 chipmaker, closed at 119,100 won, down 0.75 percent.

The local currency against the US dollar strengthened slightly, closing at 1,355.9 won against the dollar, down 4.1 won from the previous session's close.