KOSPI Surges Nearly 6% as SK Hynix's $28.7 Billion Buyback Plan Sparks Sharp Chip Stock Rebound

SEOUL — South Korea's benchmark KOSPI climbed 381.41 points, or 5.89%, to 6,852.58 as of 3:32 p.m. local time Thursday, staging a sharp reversal from the previous session's plunge after SK Hynix unveiled a massive share buyback program and easing U.S. Treasury yields lifted risk appetite across the region.

Thursday's rally represented a dramatic turnaround from Wednesday, when the KOSPI tumbled 5.80% amid a global bond market rout that had rattled investor sentiment worldwide and dragged down semiconductor heavyweights Samsung Electronics and SK Hynix. The index opened Thursday 3.23% higher before extending its gains further through the morning session, adding as much as 6.3% at one point, according to Finimize.

The rally's clear center of gravity was SK Hynix, which announced it would buy back and cancel 40 trillion won, or roughly $28.69 billion, of its own shares while committing to return more than 50% of the free cash flow it generates between 2025 and 2027 to shareholders. SK Hynix shares jumped nearly 13% on the news, according to Finimize, with the buyback plan drawing particular investor attention because canceled shares reduce a company's total share count, which can boost earnings and cash flow per share even without underlying business growth. Samsung Electronics, the KOSPI's other dominant chip heavyweight, also rallied sharply on the news, a significant factor given how disproportionately the two mega-cap stocks can move the broader index relative to most individual economic data releases.

The scale and speed of Thursday's advance proved intense enough to trigger a "sidecar," a temporary trading curb the Korea Exchange uses to cool sudden, sharp price swings. According to the Korea JoongAng Daily, the exchange suspended program trading for five minutes after the KOSPI jumped more than 5% during the session, marking the second consecutive day the index had triggered such a mechanism, following Wednesday's activation of a sell-side sidecar during that session's steep decline.

Foreign investors were net buyers Thursday, according to Finimize, adding further momentum to the rally in the index's largest weighted stocks, a dynamic market analysts noted tends to amplify price swings in heavyweight names given that foreign capital often concentrates on the largest, most liquid stocks within an index.

Beyond the SK Hynix-specific catalyst, Thursday's rebound was reinforced by a broader shift in global bond markets. According to the Korea JoongAng Daily, Wall Street's major indexes closed higher overnight as U.S. Treasury yields retreated after the U.S. Treasury Department announced plans to significantly increase buybacks of longer-term government debt. The yield on the 30-year Treasury bond, which had climbed to its highest level since 2007 earlier in the week, fell Wednesday alongside the benchmark 10-year Treasury yield, easing pressure on risk assets globally, including technology and semiconductor stocks that had come under significant selling pressure amid the earlier bond market turmoil.

Thursday's rebound adds to what has already been an extraordinarily volatile month for the KOSPI. The index had entered a technical bull market earlier in August, rebounding more than 20% from its late-July low in roughly 10 trading days, according to the Seoul Economic Daily, which cited both CNBC and Bloomberg coverage highlighting the sharp recovery. That earlier rally followed a brutal July for South Korean equities, during which the KOSPI fell 22% over the course of the month, its worst monthly decline since the global financial crisis, driven by growing concerns over whether the pace of global artificial intelligence infrastructure investment could be sustained, a selloff that deepened further as leveraged positions in semiconductor stocks were forcibly liquidated.

David Morrison, senior market analyst at Trade Nation, told CNBC during that earlier recovery period that the broader AI investment boom underpinning the rally in chip stocks had not run its course, a view that gained further support as strong recent earnings from major global technology companies confirmed continued large-scale AI-related capital spending industry wide.

Despite Thursday's sharp gains, the KOSPI remains well below the record highs it touched earlier in the year. Even after rebounding roughly 20% from its July 30 low, the index remained approximately 24% below its prior peak, according to the Seoul Economic Daily, underscoring both the severity of last month's selloff and the scale of the recovery still needed to fully retrace those losses.

The pattern of extreme single-session volatility has become a defining characteristic of the KOSPI throughout 2026, with the index repeatedly swinging between sharp double-digit percentage declines and equally sharp rebounds over the course of the year, driven largely by shifting sentiment around the sustainability of AI-related capital spending and the outsized influence Samsung Electronics and SK Hynix hold over the broader index given their combined weighting. Both companies together account for roughly half of the KOSPI's total market capitalization, meaning any significant company-specific news from either stock, such as Thursday's buyback announcement from SK Hynix, has the potential to move the entire benchmark dramatically in a single session.

Market participants are likely to continue closely watching whether Thursday's rally, driven by a combination of company-specific shareholder-return news and a broader easing in global bond market stress, can be sustained in the coming sessions, or whether the KOSPI's pattern of sharp reversals throughout 2026 will continue to define its trading heading into the final months of the year. With SK Hynix's buyback and cancellation program set to unfold over the coming years, and broader questions about the durability of AI infrastructure spending still unresolved, the interplay between company-level catalysts and macroeconomic sentiment is likely to remain the central driver of the index's volatility for the foreseeable future.