On a Monday morning in late September 2020, South Korea's stock market lifted itself by a modest but telling margin, as the country's daily count of new coronavirus infections fell to fifty, its lowest in more than a month. Investors read that quiet number as a sign that a wave born in a church and a political rally was beginning to recede, and hope gathered around the familiar giants of the market. Beneath the rise lay an older human question, whether a fragile calm at home can survive the fevers raging abroad, and whether the promise of a rival's setback in chips will prove real.
South Korean Stocks Rise 1.5% as Daily Virus Cases Fall to One-Month Low
A count that low suggested the wave was easing, and sentiment improved
Mark
So the market went up 1.5%. What actually pushed it?
Mimi
The headline trigger was the virus count. South Korea reported 50 new cases, the lowest in over a month, since the wave tied to a church and a political rally last month.
Mark
And the big companies carried it?
Mimi
Mostly. Samsung Electronics led, Hyundai Motor rose 3.2%, and Kakao rose 3.3%.
Luke
Worth noting that the cause is attributed, not proven. A single day of 50 cases is one data point, and the market's reaction to it is the reporter's reading of sentiment.
Mark
There was also a chip angle, right?
Mimi
Yes. Samsung and DB Hitek rose on hopes of benefiting from U.S. export restrictions on China's SMIC. Analyst Na Jeong-hwan said those expectations helped lift the index too.
Luke
Keep the word hopes in view. Nothing in the report says those benefits have materialized, only that investors expect they might.
Mark
What about foreign money and the won?
Mimi
Foreigners were net buyers of 9.4 billion won, and the won slipped 0.10% to 1,173.5 per dollar. Bond yields fell a bit too.
Luke
And the 9.4 billion won is small, about $8 million. It's a midday figure, so I wouldn't read much into it. The caution Na gave about the U.S. and Europe is the part still unresolved.
O Pulso
- The KOSPI climbed 1.50% to 2,312.99 as traders seized on the smallest daily case count in over a month.
- Samsung Electronics led the heavyweights higher while Hyundai Motor and Kakao surged over 3%.
- Chip stocks like DB Hitek rallied on bets that new U.S. curbs on China's SMIC would favor Korean rivals.
- Foreign investors bought 9.4 billion won of shares, but the won softened slightly and analysts warn that resurgent outbreaks in the U.S. and Europe could still derail the rally.
On a Monday morning in late September 2020, South Korea's stock market lifted itself by a modest but telling margin, as the country's daily count of new coronavirus infections fell to fifty, its lowest in more than a month. Investors read that quiet number as a sign that a wave born in a church and a political rally was beginning to recede, and hope gathered around the familiar giants of the market. Beneath the rise lay an older human question, whether a fragile calm at home can survive the fevers raging abroad, and whether the promise of a rival's setback in chips will prove real.
On Monday morning, September 28, South Korea's benchmark KOSPI climbed 34.20 points, or 1.50%, to 2,312.99. The trigger was a number that had become a kind of public promise: the country reported just 50 new coronavirus cases, its lowest daily tally in more than a month. Only weeks earlier, a fresh wave had spread out of a church and a large political rally, and investors had been waiting nervously to see whether it would fade.
The biggest companies carried the advance. Samsung Electronics led the gains, Hyundai Motor jumped 3.2%, and Kakao rose 3.3%. In chips, Samsung and DB Hitek climbed on the hope that new U.S. export restrictions on China's largest chipmaker, SMIC, might send business their way. Analyst Na Jeong-hwan of DS Investment & Securities pointed to that prospect, while cautioning that the coronavirus was still surging in the United States and Europe.
Elsewhere, the biopharmaceutical group Celltrion and its affiliates rose sharply after announcing a merger. Foreign investors were net buyers on the main board to the tune of about 9.4 billion won, around $8 million. The won eased slightly to 1,173.5 per dollar, while bond yields fell, with the 10-year benchmark dropping to 1.417%.
The mood was hopeful but conditional. The rally depended on whether domestic cases kept falling and whether the American sanctions truly lifted Korean chipmakers. Beyond the border, the outlook remained uncertain.
By 0235 GMT on Monday, September 28, the KOSPI, South Korea's benchmark stock index, had climbed 34.20 points, or 1.50%, to 2,312.99. The gain came on the back of a public health number: the country had reported 50 new coronavirus cases, its smallest daily count in more than a month.
That figure carries some history. It was the lowest since a fresh wave of infections emerged last month from a church and a large political rally. A count that low suggested to investors that the wave was easing, and sentiment improved accordingly.
The heavyweights did most of the lifting. Samsung Electronics led the gains among the market's largest names. Hyundai Motor jumped 3.2% and Kakao rose 3.3%.
There was also a second story in the chip sector. Shares of Samsung Electronics and DB Hitek rose on hopes that the two South Korean chipmakers could benefit from new U.S. export restrictions on SMIC, China's biggest chipmaker. Na Jeong-hwan, an analyst at DS Investment & Securities, said expectations of possible benefits from the U.S. sanctions on SMIC also helped lift the KOSPI. He added that concerns over a resurgence of the coronavirus in the United States and Europe persist.
In the biopharmaceutical sector, Celltrion and its affiliates Celltrion Pharm and Celltrion HealthCare jumped after the company announced a merger.
Foreign investors were net buyers on the main board, purchasing 9.4 billion won, about $8.01 million, worth of shares.
The currency moved the other way. On the onshore settlement platform the won was quoted at 1,173.5 per dollar, 0.10% weaker than its previous close of 1,172.3. In offshore trading it was quoted at 1,173.7, and the one-month non-deliverable forward contract was at 1,173.3.
Bond yields fell. December futures on three-year treasury bonds rose 0.03 points to 112.06. The most liquid three-year Korean treasury bond yield dropped 1.2 basis points to 0.843%, while the benchmark 10-year yield slipped 0.6 basis points to 1.417%.
The day's rally rests on two things: whether the domestic case count keeps falling, and whether the SMIC restrictions deliver the hoped-for benefit to Korean chipmakers. Analysts are also watching for any worsening of the outbreaks in the United States and Europe.
Citações Notáveis
Expectations of possible benefits from U.S. sanctions on SMIC also lifted KOSPI, but concerns over resurgence in coronavirus in the U.S. and Europe persist.— Na Jeong-hwan, analyst at DS Investment & Securities
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Economy & Finance