KOSPI Hits Intraday Record Then Reverses Lower as SK Hynix Posts Record Earnings

KOSPI opened strong and climbed to an intraday record of 6,557 points. Foreign investors briefly turned net buyers, appearing to lift the index further, but quickly flipped back to selling, dragging the index down to around the 6,300 level. The KOSDAQ fell even more sharply, down nearly 2% near 1,166 points, while the won traded around 1,483 per dollar.

Foreign investors sold heavily in shipbuilding, defense, and SK Hynix shares. Market watchers described a 'bottleneck' phenomenon in which, absent fresh buying power, capital rotates among existing holdings rather than flowing in from new sources — sellers in one stock funding purchases in another, driving stock-specific rather than index-wide volatility.

Panelists argued this rotation could be seen as an opportunity rather than a concern, since foreign selling in construction and shipbuilding names largely reflects profit-taking after strong gains rather than any deterioration in fundamentals. Still, they cautioned that intraday swings — such as large-cap stocks surging over 4% before decelerating to roughly 1% gains — warrant careful risk management.

The afternoon decline was amplified by external factors. U.S. futures fell about 1% and Asian markets broadly weakened in tandem; Japan's market also hit a record before reversing to fall as much as 1.5%. This suggested the pullback stemmed from a broad-based correction tied to surging oil prices and geopolitical risk rather than any Korea-specific issue.

SK Hynix reported first-quarter operating profit of 37.6 trillion won and revenue above 52 trillion won, both record highs, with a record operating margin of 71.5% marking four consecutive quarters of record profit. The result fell slightly short of the roughly 38 trillion won consensus from the past month, and shares, which touched a record 1.278 million won intraday, reversed to fall near 1.205 million won.

On the earnings call, management struck an optimistic tone on AI memory demand, dismissing oversupply concerns and arguing that efficiency technologies would increase, not decrease, memory usage. The company said it is reviewing new forms of long-term supply contracts and plans to ship samples of its latest HBM4E chips in the second half, targeting mass production in 2027.

Panelists attributed SK Hynix's exceptional margin to its near-monopoly position in HBM, calling the durability of that dominance the key variable for the stock going forward. Because expanding HBM output on shared production lines requires cutting legacy DRAM output, and legacy DRAM prices are currently rising in tandem, manufacturers have little incentive to fully pivot toward HBM — suggesting the dominance could persist longer than expected. The company's first-ever shift to a net cash position (35 trillion won) was also flagged as a key signal to watch for future investment and shareholder-return decisions.

Samsung Electronics surged more than 4% intraday to 229,500 won, pushing its market capitalization above $1 trillion — a first for a Korean company — and overtaking Warren Buffett's Berkshire Hathaway to rank 12th globally by market cap. It remained the top foreign net-buy stock as of 11 a.m., with panelists noting the narrow gap to Walmart, ranked just above it, suggesting further room to climb the rankings.

MLCCs (multilayer ceramic capacitors), substrates, and sockets have outperformed both the KOSPI and KOSDAQ so far this year. Often called 'the rice of the electronics industry,' MLCCs stabilize electrical current in circuits and are used in virtually every device with electricity flowing through it, from smartphones to AI servers — with higher power consumption driving greater MLCC content per device.

The global MLCC market is dominated by Japan's Murata and Korea's Samsung Electro-Mechanics, and Murata's recent price hikes are expected to allow Samsung Electro-Mechanics to raise its own prices. In substrates, FCBGA packages used for CPUs and GPUs and multilayer boards that stack circuit layers were identified as key products, while sockets — used to test finished chips for defects — see demand scale directly with chip production volumes.

Related names cited included Samsung Electro-Mechanics for MLCCs and Leeno Industrial, ISC, and TSE for sockets, with numerous firms participating across different substrate segments. Samsung Electro-Mechanics shares reversed from gains to losses in the afternoon, with concerns that utilization already above 90% could cap further price hikes and, by extension, earnings momentum, given the recent rally was driven largely by price increases rather than volume.

Panelists pushed back on this concern, however, noting that AI-related capital spending tends to follow an 'animal spirits' logic rather than cost discipline — once big tech commits to a data-center buildout, it rarely reverses course over near-term cost inflation. This dynamic was cited as a reason semiconductor and component prices could rise further than the market currently expects in the second half of the year.

Surging oil prices were identified as the key driver of recent market volatility, with WTI climbing to around $94 amid ongoing Iran-U.S. military tensions. The won traded around 1,483 per dollar.

Panelists argued the current oil spike is unlikely to be sustained over the long term — a scenario in which oil stayed near $100 a barrel for three to five years would inflict severe damage on the global economy, and the war-related triggers behind the spike are themselves unlikely to persist indefinitely. They urged investors to base decisions on this longer-term view rather than reacting to short-term swings.

Renewed uncertainty over whether the Iran-U.S. conflict has ended shook markets again. U.S. President Donald Trump said there was no fixed timeline for ending the confrontation and reaffirmed a continued containment stance, sending oil prices higher and U.S. futures down roughly 1%.

The fallout weighed on Asian markets broadly, not just KOSPI, with Japan and Taiwan also falling. Japan's market hit a fresh record before reversing to drop as much as 1.5%, reinforcing the view that the pullback reflected geopolitical risk rather than any Korea-specific factor.

As global investment banks have raised KOSPI price targets, the Value-Up policy has emerged alongside memory semiconductors as their second most cited investment theme. The policy aims to normalize the valuation of previously undervalued Korean firms through measures like share buybacks. Unlike chip prices, which Korea cannot control, Value-Up is seen as more achievable since it depends on domestic policy and corporate effort — a point foreign brokerage reports have highlighted favorably, noting Korea continues pursuing reform (including a third round of Commercial Act revisions) even as Japan and Taiwan have largely exhausted similar playbooks.

However, panelists criticized what they described as a visible slowdown in reform momentum as political attention shifts toward upcoming local elections. What began as rapid, decisive action on corporate governance reform has recently lost pace, and speakers argued that since meaningful change is inherently about speed, momentum needs to be reaccelerated.

On the demand side, the National Pension Service has resumed modestly accumulating domestic equities, and a potential shift of retirement pensions into a fund-management structure — still pending policy discussion — could unlock hundreds of trillions of won in fresh capital from the roughly 450-500 trillion won retirement pension pool. That said, the pace of Korean retail investors' capital returning from U.S. markets remains slow, and a wave of pending major U.S. IPOs (SpaceX, Anthropic, OpenAI) continues to keep funds parked abroad, leaving the net effect on domestic liquidity roughly neutral for now.

Looking five or ten years ahead when assessing companies or industries — rather than one or two — was presented as a way to actually improve forecasting accuracy and reduce risk. While near-term results such as next quarter's earnings matter, the real essence of investing lies in how much long-term insight can be drawn from those results, which is ultimately what allows investors to stay in the market and build wealth over time.

It was stressed that thinking long-term should not be confused with simply holding a single stock indefinitely. Long-term thinking means looking further ahead and remaining engaged in the market over time — not a mandate to never sell a particular position.

This framework was applied to the current oil price surge and memory chip rally. Because oil sustaining $100 a barrel for three to five years would be unsustainable for the global economy, the current spike was judged a low-durability, short-term phenomenon; by contrast, memory chip prices were judged still historically reasonable relative to past cycles, suggesting their rally could prove more durable.

The shorter one's time horizon, the more likely one is to be wrong, while deliberately extending one's time horizon paradoxically improves the odds of being right, panelists argued. Getting absorbed in day-to-day headlines about the Iran-U.S. conflict makes the market unpredictable, whereas assuming an outcome a few weeks out reduces uncertainty and enables more informed decisions.

On the same day KOSPI hit a record high, short-selling standby capital — measured via securities lending balances — also hit a record, it was reported. Short selling involves an investor who expects a stock to fall borrowing shares they don't own, selling them immediately, and later buying them back at a lower price to return to the lender, pocketing the difference. It was described as a mechanism designed to let both bullish and bearish investors participate in price discovery, improving overall market efficiency.

To short a stock, an investor must first borrow shares — a process called securities lending. A rising lending balance indicates a growing pool of shares borrowed for future short sales, which can be read as a signal that more investors are turning bearish on the market.

The payoff structure of short selling is essentially the mirror image of a long position, it was noted. A buyer's maximum loss is capped at the invested principal, while gains are theoretically unlimited on the upside; a short seller's maximum gain is capped (a stock can only fall to zero), while losses are theoretically unlimited if the price rises instead. As a result, when prices unexpectedly rise, short sellers often rush to buy back shares to limit losses — so-called short covering — which can itself accelerate the rally.

The simultaneous record high and record short interest was thus interpreted as holding latent upside potential: if the index resumes climbing, a wave of short covering could add fuel to the rally. Still, panelists cautioned against letting such supply-demand indicators drive frequent trading decisions, urging investors instead to keep evaluating whether their original reason for buying a stock or sector remains valid — and to avoid basing trades solely on short-term metrics like changes in lending balances when that original thesis hasn't changed.