South Korea’s SK Hynix Inc. experienced a significant surge on March 15, 2024, after BlackRock Inc., the world’s largest asset manager, revealed it holds a 5% stake in the semiconductor giant. This announcement played a crucial role in propelling the KOSPI index above 5,800 for the first time. The stock of SK Hynix rose by 6.2%, reaching 949,000 won (approximately $656.29), surpassing its previous intraday high of 931,000 won set earlier this year.
The increase followed a regulatory filing indicating that BlackRock now possesses 36,407,157 shares of SK Hynix, equivalent to the aforementioned 5% stake. Another company, Samsung Electro-Mechanics Co., also disclosed a 5% stake by BlackRock, which contributed to its own stock price advancing by 5.3%.
KOSPI Index Reaches New Heights
As the stock of SK Hynix rallied, the benchmark KOSPI index climbed 2.3% to close at 5,808.53. Samsung Electronics Co., the largest stock on the market, saw a modest increase of 0.1%, finishing at 190,100 won. The KOSPI opened at 5,696.89, reflecting a 0.4% gain at the start of trading, and showed continued upward momentum throughout the session. It now stands approximately 3.3% away from the 6,000 mark.
Data from the Korea Exchange revealed that institutional investors were net buyers of 1.61 trillion won, compensating for net sales of 986.1 billion won by retail investors and 743.0 billion won by foreign investors. In contrast, the junior KOSDAQ index dipped by 0.6%, closing at 1,154.00.
Market Dynamics and Sector Performance
Analysts attribute the KOSPI’s rally to ongoing inflows into large-cap stocks and the resilience of key export sectors, particularly semiconductor and defense companies. The rise in defense shares aligns with heightened geopolitical tensions, spurred by reports of potential military actions from the United States in response to stalled nuclear negotiations with Iran. Notable increases were seen in defense-related stocks, with Hanwha Aerospace Co. rising by 8.1%, Hanwha Systems Co. increasing by 9.5%, and Hyundai Rotem Co. gaining 4.8%.
Lee Kyung-min, an analyst at Daishin Securities Co., noted that large passive fund inflows into the domestic market have persisted, stating, “The KOSPI was able to withstand global market uncertainty on the back of strong industrial competitiveness.”
In contrast, other major Asian equity markets experienced declines that day, highlighting the KOSPI’s unique performance. US stocks also faced downward pressure, with President Donald Trump issuing warnings to Iran regarding possible military action. Additionally, private-equity firm Blue Owl Capital announced the suspension of investor redemptions in certain funds, raising concerns about credit conditions. Blue Owl has been significantly involved in backing artificial intelligence infrastructure, notably through investments in data center construction.
The developments in South Korea’s markets reflect a broader narrative of resilience amid global uncertainties, with SK Hynix’s surge serving as a focal point for investor confidence and market dynamics.
