Markets
The Kospi Opened Down 3.2% and Turned Positive Within Two Hours. Nasdaq Futures Rose 1.3% Before Europe Woke Up
Seoul's Kospi opened at 5,488.41 on October 19, down 3.17%, after Friday night futures had pointed to a far worse session, then recovered to trade above Friday's close by 10:40 a.m. as institutions and foreign investors bought Samsung and SK Hynix, and closed up 1.42% at 5,748.52. Nasdaq 100 futures were up 1.3% by 05:00 UTC, the Nikkei pared a 2.3% loss and Brent fell below $108.
The Monday that Asian traders had spent the weekend dreading lasted about two hours. Kospi 200 night futures had closed 3.5% lower on Friday evening after the Nasdaq fell 2.15%, and by Sunday the pre-open indications in Seoul pointed to a drop of 7% to 8%. The cash index opened at 5,488.41 on October 19, down 3.17% from Friday's 5,668.05, and that was the low. By 10:33 a.m. Seoul time it was 5,682.69, up 0.26%; at 10:40 a.m. it was 5,698.63, up 0.54%; and at 2 p.m., with the European morning beginning, it traded near 5,707, up 0.7%. It closed at 5,748.52, up 1.42% on the day and 4.7% above the opening print, after a high of 5,757.40 in the final hour.
The buyers were the ones who had been absent all month. Foreign investors, who sold a net 11.2 trillion won of Kospi shares last week and had been net sellers for twelve sessions before Friday, were net buyers of 526.7 billion won by mid-morning, according to the exchange; institutions bought a net 671.3 billion won, of which pension funds accounted for 184.6 billion won, and retail investors sold a net 1.25 trillion won into the recovery. The largest institutional purchases were Samsung Electronics, SK Hynix and Samsung SDI. Samsung opened at 207,000 won, down 3.9%, and traded back to 216,000 won, above Friday's 215,500; SK Hynix opened at 1,212,000 won, down 4.7%, and recovered to 1,260,000 won, still 0.9% lower. Samsung Biologics rose 5.4% and LG Energy Solution 5.6%.
Tokyo had a worse morning and a smaller recovery. The Nikkei 225 opened at 64,820 and fell to 63,831.78, down 2.28%, before trimming the loss and closing at 64,975.89, down 0.53%, 1.8% above the morning low; Taiwan's Taiex was down 2% at its low and closed 0.61% lower at 46,822. Shanghai was up 0.6% in the afternoon after the third-quarter GDP report beat forecasts, Hong Kong was closed for the Chung Yeung Festival, and Australia's ASX 200 gained 0.4%, helped by a 20% jump in Cleanaway Waste Management on a takeover agreement with EQT.
The reason the recovery held was visible on US futures screens. Nasdaq 100 futures, which had settled at 29,391.50 on Friday, were at 29,785 by 05:00 UTC, up 1.3%; S&P 500 futures were up 0.8% and Dow futures 0.5%. Brent crude fell 1.7% to $108 a barrel after President Trump waived the sanctions and tariffs on buyers of Russian oil that were due to take effect on Sunday, the dollar index slipped to 101.8, the won strengthened 0.8% to 1,330 per dollar and gold rose to $4,200. The hedge fund collapse rumoured on Friday afternoon, which had pushed the VIX to its highest since June, produced no confirmation over the weekend.
None of this settles the question that sank the Kospi 18.8% in the first half of October: whether the AI data-centre build-out is being financed on terms that can survive higher rates. What it shows is positioning. After a 7.57% circuit-breaker day on Thursday and the worst week for Samsung and SK Hynix since 2008, the sellers who remained were retail, and the first bid from institutions reversed the open. The test comes on Wednesday evening US time, when Lam Research, Meta and the rest of Wednesday's crowded earnings slate report; Nvidia's GTC developer conference runs from Tuesday to Thursday. A market that can rise 3% from its open on no news can fall the same way on bad news.