Rally in chip stocks drives Kospi up 1.4%

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Rally in chip stocks drives Kospi up 1.4%

A screen at Hana Bank's trading room in central Seoul shows the Kospi closing at 3,013.25 points on Monday, up 42.23 points, or 1.42 percent, from the previous trading day. [NEWS1]

A screen at Hana Bank's trading room in central Seoul shows the Kospi closing at 3,013.25 points on Monday, up 42.23 points, or 1.42 percent, from the previous trading day. [NEWS1]

 
Stocks rallied by almost 1.5 percent Monday as a surge in chip heavyweights, such as Samsung Electronics and SK hynix, led the market amid projections that a price correction for dynamic random access memory (DRAM) chips is drawing to an end earlier than expected. 
 
The won rose against the dollar.
 
The benchmark Kospi jumped 42.23 points, or 1.42 percent, to close at 3,013.25 points.
 
Trading volume was moderate at about 524 million shares worth some 12.8 trillion won ($10.8 billion), with gainers outnumbering losers 490 to 372.
 
Foreigners bought a net 796 billion won and institutions purchased 567 billion won, with purchases mostly centered around chip stocks. Retail investors sold 1.4 trillion won.
 
Stocks got off to a bullish start, as Korea's exports jumped 27.6 percent on-year in the first 20 days of November on high demand for chips, autos and petroleum goods.
 
"There had been strong buying demand for small and mid caps, but today, foreigners and institutions seem to have shifted to large caps," Shinyoung Securities analyst Park So-yeon said.
 
Chip-related shares closed higher following U.S. analysts predicting a positive outlook for the industry.
 
Evercore ISI’s analyst C.J. Muse named chipmaker Micron Technology as one of his top picks on Nov. 19, based on “pricing decline expectations into 1HCY22 becoming ‘less bad,’ estimates likely bottoming in 1H22, and green shoots arising from PC constraints elsewhere easing.”
 
Citigroup analyst Christopher Danely announced that there is increasing demand for DRAM memory among PC makers and that a pricing correction in the DRAM market is drawing to a close.
 
“Samsung Electronics and SK hynix jumped as [shares of] Micron in the United States jumped,” said Mirae Asset Securities analyst Kim Seok-hwan. “Expectations for DRAM market stabilization and turnaround will be reflected in the market, with foreign and institutional investors buying electronic makers’ stocks leading to a positive demand and supply.”
 
Samsung Electronics soared 5.2 percent to 74,900 won, and chipmaker SK hynix surged 7.17 percent to 119,500 won.
 
Internet portal operator Naver added 1.49 percent to 410,000 won, and Kakao rose 1.18 percent to 128,500 won. 
 
Chemical firm LG Chem increased 0.92 percent to 765,000 won, and Hyundai Motor jumped 4.3 percent to 218,500 won. Battery maker SK Innovation added 1.39 percent to 219,500 won. 
 
The Kosdaq lost 9.61 points, or 0.92 percent, to close at 1,032.31.  
 
The local currency closed at 1,185.1 won against the dollar, down 0.2 won from the previous session's close.
 
Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds added 5.3 basis points to 2.017 percent, and the yield on the benchmark 10-year government bond fell 4.1 basis points to 1.54 percent.
 

BY LEE TAE-HEE, YONHAP [lee.taehee2@joongang.co.kr]
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