Kospi rattled by Iran-Kuwait escalation headlines, foreign and pension buying drives rebound as chip news stays upbeat

The Kospi opened higher but reversed to fall as much as 2% after breaking news that Iran's Revolutionary Guard had struck U.S. military bases in Kuwait and Bahrain. The index briefly broke below the 7,100 level, with some noting valuations had fallen to levels last seen around the global financial crisis. Concerns deepened further after U.S. Central Command confirmed strikes on roughly 90 Iranian military sites.

Buying from foreign investors and pension funds in the afternoon helped the index recover. The Kospi closed up about 0.4% at 7,278 points and the Kosdaq rose about 1.3% to 795 points, while the won traded around 1,506 per dollar. Foreigners bought roughly 110 billion won of Kospi shares and 8 billion won of Kosdaq shares, extending three straight sessions of net futures buying.

Leveraged and inverse ETFs continued to dominate the top of the trading-value rankings, raising concerns that the market is being distorted. Commentators noted that genuine positive news is failing to be reflected as fear sentiment gets amplified, with retail investors piling into inverse and leveraged products contributing to daily swings of around 10% in either direction.

On July 8 (local time), the Dow Jones Industrial Average closed lower on Wall Street as geopolitical tensions over Iran reignited. The index, which had been rallying, took a breather.

The Nasdaq Composite traded near flat for most of the late session before staging a last-minute rebound to close up about 0.2%. A semiconductor sector that had been declining steadily turned sharply positive, driving much of the gain.

The Philadelphia Semiconductor Index rebounded after two straight sessions of pullback following the prior day's sharp drop, holding its support level. Micron Technology rose about 1%, SanDisk jumped nearly 7%, and Nvidia gained close to 4%, while equipment makers Arista Networks and Dell Technologies also advanced.

The S&P 500 slipped roughly 0.3% to 1%, with nine of eleven sectors declining, but resilient tech shares and an energy sector boosted by the oil spike limited the losses. The Russell 2000 fell 0.9%.

SK hynix's U.S. depositary receipt offering drew subscriptions more than seven times the offered volume. Cornerstone orders alone accounted for 25% of the deal, and bookbuilding closed earlier than scheduled. Listing is set for July 10, with a reference price of $158, roughly 2.3 million won.

The new shares represent 2.5% of outstanding stock, or 17.79 million shares, but the registration limit filed with the U.S. SEC is ten times larger at 25%, suggesting room for additional depositary issuance ahead. Demand came from long-only funds, tech-focused funds and sovereign wealth funds, and Chairman Chey Tae-won is set to visit the Nasdaq site on the 12th for an interview.

Nuclear power-related stocks also gained. Boseong Power Tech, Woojin Entech and Woori Technology rose 2-3%, buoyed by presidential policy chief Kim Yong-beom's comments favoring expanded nuclear construction.

Nvidia shares rose nearly 4% after reports that Beijing may allow limited purchases of Nvidia's H20 chips. Total purchases by major firms including Alibaba, ByteDance and DeepSeek were said to be under 200,000 units, though the report was not officially confirmed.

Broadcom shares climbed about 4.8% on news of expanded chip supply cooperation with Apple. A follow-up report that Apple would invest $30 billion in Broadcom to expand US-based semiconductor manufacturing capacity further supported the chip-sector rebound.

Memory chipmakers also rallied. Micron Technology reversed much of its prior after-hours decline to close up about 1%, while SanDisk surged nearly 7%. Market participants largely read the rebound not as the end of the AI rally but as a rotation of funds out of first-half chip-stock winners into other sectors.

UBS, Goldman Sachs and Deutsche Bank characterized the pullback as an orderly de-risking process rather than forced liquidation, saying no clear signs of retrenchment in AI investment had emerged.

According to Bloomberg, Jeff Bezos's space company Blue Origin is pursuing roughly $10 billion in outside funding at a $130 billion valuation. The news follows last month's SpaceX share sale, extending a string of space-company fundraising headlines.

A large institutional investor is reportedly leading the round with a $4 billion commitment. Blue Origin has until now been funded entirely by Bezos personally, largely through sales of his Amazon stake, and this marks the company's first acceptance of outside capital given the scale of investment required.

Blue Origin suffered a New Glenn rocket launch-pad explosion in May, underscoring the difficulty of the space business. The company is pursuing its Tarawa satellite communications network, planning to deploy more than 5,400 satellites in equatorial orbit, with the first launch expected late next year.

Market observers say the funding reflects not just space infrastructure but the potential for AI networks operating in orbit, noting Blue Origin remains undervalued relative to SpaceX's $86 billion valuation.

Meta announced a roughly $9.2 billion (13 trillion won) data center in Canada, its 33rd gigawatt-scale facility, reversing concerns raised just a week earlier that surplus computing capacity might slow AI investment. The same day, Bank of America was confirmed to have extended a loan of more than $500 million to OpenAI, seen as a sign of financial-sector confidence in the AI ecosystem.

Reports emerged that Nvidia's H200 chips would be allowed for limited sale to Chinese firms such as Alibaba and ByteDance. China, which had restrained U.S. AI chip imports to protect its domestic chip industry, was said to have shifted policy as computing demand outstripped supply. The Philadelphia Semiconductor Index rallied about 2% on the news, extending gains into the close.

Filing documents for Chinese memory maker CXMT's listing showed proceeds of only about 5.7 trillion won with no HBM investment plans included. Analysts read this as CXMT focusing on commodity DRAM while remaining far behind Korean memory majors in HBM. Separately, Nikkei ran an analysis citing U.S. antitrust scrutiny to argue that Samsung Electronics and SK hynix's memory market dominance could turn into a trade risk.

The June FOMC minutes showed upside risks to price stability remained elevated, while downside risks to maximum employment had eased somewhat. A few members reportedly said a rate hike would have been appropriate at the June meeting.

Most participants judged further tightening would likely be needed if inflation pressures failed to ease, while also noting rates could be held steady or cut if inflation returns to the 2% target. Markets read the minutes as somewhat hawkish.

The 10-year Treasury yield rose after the minutes were released, and market-implied odds of an additional Fed rate hike this year climbed to about 60%. Against this backdrop, UBS recommended relatively defensive names including Eli Lilly, Lockheed Martin, Stryker, McDonald's, Charles Schwab and Medtronic.

The overnight U.S. and global market brief above is compiled from 삼프로TV 오전 방송 (https://www.youtube.com/watch?v=FeM7qlhVkI0).

Concerns over escalation grew after reports that Iran's Revolutionary Guard struck two U.S. bases each in Kuwait and Bahrain. U.S. Central Command also confirmed it had carried out strikes on around 90 Iranian military sites, with attacks continuing on both sides. President Trump had said the previous night that this was not an escalation, but the day's developments shook that assessment again.

WTI crude jumped about 3% to touch $74. Asian markets were mostly risk-off, with Taiwan's index flat and Hong Kong's Hang Seng and Shanghai Composite turning negative.

President Trump, attending the NATO summit, suggested the ceasefire with Iran was effectively over, rattling markets. He said he did not want to deal with Iran and suggested the US could destroy every bridge in Iran if necessary, in remarks that added to the hawkish tone.

Iran had earlier fired missiles and drones at some Gulf allies, though reports indicated no major damage. The US then launched retaliatory strikes over the ship attacks, and reports of a further round of strikes emerged after the market close, heightening geopolitical uncertainty.

Trump said the US was considering re-blockading the Strait of Hormuz and possibly striking desalination facilities, while Iran also raised the prospect of blocking the strait. As a result, crude oil prices surged nearly 10% in two days, with WTI trading below $74 and Brent around $78.

Still, Trump's remarks downplaying the chance of renewed full-scale war helped calm markets, and banks including JPMorgan noted that neither the US nor Iran wants a prolonged conflict, which capped the oil rally. The dollar index actually weakened even as oil rose, while the 10-year Treasury yield climbed on both the oil move and the FOMC minutes.

Chinese online retailer Alibaba surged nearly 12% Wednesday, leading a broader rally in Chinese tech shares. E-commerce platform JD.com and Baidu also advanced as China AI-related stocks rose broadly.

Over the same period, investors kept selling US and Korean memory-chip stocks, prompting interpretations that capital was rotating out of Korea and into China. Some argued Chinese AI firms' low chatbot pricing could reshape industry dynamics.

Alibaba, despite pouring huge sums into large-language-model development with little share-price payoff, rebounded after an analyst briefing indicated narrowing losses and improving profitability in its June-quarter commerce business. Its valuation stands at roughly 15 times earnings.

DeepSeek's per-token pricing remains far below OpenAI's, while Zhipu AI's GLM model ranked among the top-performing models, underscoring the price competitiveness of Chinese AI models.

Presidential policy chief Kim Yong-beom said new nuclear plants should be built wherever local communities want them, adding that use of LNG cogeneration is also under discussion with industry. This was read as confirming that nuclear power and large-scale semiconductor mega-projects are effectively being pursued as a package given expected power demand.

The Financial Supervisory Service's capital markets special judicial police uncovered suspected front-running by staff at an economic broadcaster and conducted a raid. Staff are suspected of buying roughly 300 stocks ahead of undisclosed positive coverage and selling after the news moved prices, with the amount involved estimated at around 1 billion won. President Lee Jae-myung posted on social media that capital market fairness cannot be compromised and that stock manipulation will always be caught by the triple net of the FSS, police and prosecutors.

On Morgan Stanley's rotation call urging investors to trim chips in favor of hyperscalers, Lee Kwang-soo argued the report merely rationalizes after the fact what investors were already doing. He said institutions lean on words like rotation because they compete on short-term returns, but that this offers no meaningful guidance for ordinary retail investors who cannot reshuffle holdings every month.

He noted Morgan Stanley had previously shocked the market with a 'Winter is Coming' report warning of a memory downturn, only to walk it back roughly six months later. He also recalled allegations of a conflict of interest, where the firm issued bearish notes while reportedly having pre-placed large orders, adding that SK hynix recently excluded Morgan Stanley from its ADR institutional allocation.

He directly rebutted Nikkei's report, which cited U.S. antitrust scrutiny to warn that Korean chipmakers' dominant position could lead to a collapse similar to Japan's semiconductor industry in the 1980s. He explained that Japan's decline stemmed not from trade pressure but from its own failure to adapt to the shift toward PCs and commodity chips, whereas Korea, led by SK hynix, is now driving the shift from commodity DRAM to specialized HBM. He also flagged that the Nikkei piece relied on an anonymous Korean source, amplified further by domestic outlets re-citing it.

On the front-running case involving the economic broadcaster's staff, he framed it not as individual misconduct but as institutional responsibility, arguing that a media outlet buying stocks ahead of its own market-moving coverage amounts to market manipulation, and called for sanctions and preventive measures against the outlet itself.

Park Si-dong sharply criticized the fact that leveraged and inverse ETFs keep dominating the top of Kospi's trading-value rankings, saying the market is effectively being turned into a gambling table. He said this pattern of the index swinging roughly 10% in either direction within a single day, without reflecting genuine news or supply-demand fundamentals, keeps repeating.

He argued regulators keep voicing awareness of the problem without taking concrete action, and called for trading to be suspended immediately before even debating delisting, restricting access to professional investors, or raising margin requirements. He said the market keeps being damaged while such discussions drag on.

He also warned that selling a large volume of a stock while simultaneously buying inverse-leveraged products on it could create a self-reinforcing downward spiral, and said repeated volatility of this kind risks pushing retail investors' hard-won long-term investing habits back toward short-term speculation.