Rotation Focused on Semiconductors... Leading Market Caps Perform Well, KOSPI Approaches 3250

Samsung Electronics, SK Hynix, and Other Large-Cap Stocks Rise by Around 2%

On the 3rd, employees are working at the Myeongdong Hana Bank headquarters in Jung-gu, Seoul. [Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] Due to growing expectations for economic recovery following the expansion of COVID-19 vaccinations, investment sentiment that had been concentrated on consumer-related stocks is now shifting toward the semiconductor sector. The strong performance of top market capitalization stocks such as Samsung Electronics and SK Hynix has driven the KOSPI to rise near the 3250 level.

As of 11:17 a.m. on the 3rd, the KOSPI recorded 3249.15, up 0.77% from the previous day. After a firm start at 3224.96, the index has been increasing its gains.

In particular, the semiconductor sector showed remarkable strength. Samsung Electronics and SK Hynix, which hold the first and second positions in market capitalization, both rose by over 2%, leading the index. Sangyoung Seo, a researcher at Mirae Asset Securities, explained, "Recently, the index has been moving sideways without significant changes, with differentiated performance among individual stocks continuing. Funds that had been concentrated in consumer stocks due to expectations of economic recovery have now shifted to the semiconductor sector. This kind of rotation is expected to continue for the time being."

Apple’s disclosure of its supplier list also appears to have had an impact. Among the companies included in Apple’s recently announced '2021 Apple Supplier List,' 13 are Korean firms (based on headquarters location), making Korea the second-largest supplier country after China, which has 15. Samsung affiliates such as Samsung Electronics, Samsung Electro-Mechanics, and Samsung SDI, as well as LG affiliates including LG Chem, LG Display, and LG Innotek, each had three companies listed. SK Hynix, ranked second in market capitalization, was also included, along with Seoul Semiconductor and Deokwoo Electronics.

Meanwhile, by investor type, foreign investors and institutions showed strong buying. They net purchased 114.3 billion KRW and 232.8 billion KRW respectively, while individual investors net sold 361 billion KRW.

Many sectors rose. The order of gains was electric and electronics (2.31%), medical precision (2.21%), and manufacturing (1.19%). Steel and metals (-1.54%) and construction (-0.79%) declined.

The KOSDAQ index rose 0.94% from the previous day to 990.28. It also opened firm at 981.52 and has been steadily rising.

In the KOSDAQ market, foreign investors alone net purchased 60.7 billion KRW. Individual and institutional investors net sold 46.1 billion KRW and 4.1 billion KRW respectively.

Most sectors rose. The semiconductor sector had the largest gain at 2.89%, followed by telecommunications equipment (2.60%) and IT hardware (2.24%). Textile and apparel (-0.50%) and transportation (-0.41%) declined.