Samsung Boosts South Korean Market, KOSPI Closes Higher; Won Weakens Amid Pension Service Activity

South Korean shares extended their winning streak to four consecutive sessions on Wednesday, driven by strong gains in Samsung Electronics. The company’s stock rose 3.43% after Nvidia CEO Jensen Huang expressed confidence in Samsung’s ability to develop a new high-bandwidth memory (HBM) chip design, which could be a key supply for Nvidia’s products. The KOSPI index closed up 28.95 points, or 1.16%, at 2,521.05, marking a positive day for the market.

Despite the market’s overall upward movement, the South Korean won weakened slightly, and the benchmark bond yield experienced mixed movements. The won was quoted at 1,455.0 per dollar, marking a 0.14% decline from its previous close of 1,453.0. Meanwhile, the 3-year Korean treasury bond yield edged up by 0.3 basis points to 2.511%, while the 10-year yield fell 1 basis point to 2.799%.

Currency Movements and Pension Fund Impact

The decline in the won came amid suspicion from two local FX swap dealers that the National Pension Service (NPS) might be selling dollar-won forwards as part of its strategic currency hedging. This move has been contributing to some stability in the won. “Sizable amounts of flow from pension are out in the market for 6-month and 1-year tenures,” one anonymous dealer noted.

Performance of Key Stocks

Among South Korea’s heavyweight stocks, Samsung Electronics emerged as a standout, climbing 3.43%. However, its peer SK Hynix saw a modest loss of 0.15%. Battery maker LG Energy Solution also saw a solid gain of 2.19%. Meanwhile, Hyundai Motor rose 1.18%, and its sibling automaker Kia Corp saw a 1.92% increase.

However, not all stocks had a positive day. Leading search engine Naver and messaging service Kakao faced declines, with Naver dropping 0.48% and Kakao tumbling 3.23%.

Foreign Investment Activity

Foreign investors were net buyers of South Korean stocks, purchasing shares worth 201.6 billion won on the main board. This positive inflow into the stock market likely contributed to the KOSPI’s upward movement.

Overall, South Korean markets saw a strong performance on Wednesday, bolstered by tech and automotive stocks, while currency movements and bond yields reflected ongoing market dynamics.

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