Semiconductor-Led 'Seven-Day Rally' Reclaimed: Will It Continue After Chuseok and U.S.-China Summit?

The KOSPI surpassed the 7,000-point mark on a closing basis for the first time in six trading days, buoyed by gains in the semiconductor sector. In the United States, comments suggesting worsening memory supply shortages circulated, while in Korea, announcements that the semiconductor industry recorded record-breaking export performance fueled buying momentum. In the securities industry, expectations include potential (watch-and-wait) sentiment ahead of the Chuseok holiday closure and speculation that the outcome of the U.S.-China summit will influence AI (artificial intelligence) investment sentiment.

On the 21st, the KOSPI closed at 7007.72, up 113.49 points (1.65%) from the previous trading day. This marked its first close above the 7,000-point level since the 10th, ending a six-day streak.

The positive momentum in U.S. semiconductor stocks, which withstood global interest rate pressure, is believed to have spilled over into the domestic stock market. On the 18th (local time), the Philadelphia Semiconductor Index rose by 2.78% on the New York Stock Exchange, reflecting strong performance across semiconductor stocks. Broadcom (up 2.97%), Micron (up 3.92%), ASML (up 3.08%), Lam Research (up 6.87%), Applied Materials (up 6.51%), and ARM (up 4.04%) all rose simultaneously. This occurred even as the U.S. 10-year Treasury yield surpassed 5% intraday and the 2nd-year yield reached its highest level since July 2024.

Strong domestic semiconductor exports also became a driver of index gains. According to data released by the Korea Customs Service on this day regarding "the 1st–20, 2026 Export and Import Status," export value during this period totaled $71.4 billion, a 78.3% increase year-on-year. This represents the highest export performance for the the 1st–20 period in history. Semiconductors accounted for nearly half of this total at 47.8%, up 24.1 percentage points from the same period last year. Semiconductor exports surged by 259.4% to $34.1 billion, setting a new record for mid-September export figures.

Lee Kyung-min, FICC Deputy Head at Daishin Securities, stated, "While we must consider the supply-demand effects triggered by SanDisk's inclusion in the U.S. S&P 100 Index, TrendForce's forecast of rising memory prices and Intel CEO's comments on worsening memory shortages have sustained expectations for semiconductor earnings." He added, "Major events such as the September Federal Open Market Committee (FOMC) meeting in the U.S. and the Bank of Japan (BOJ) monetary policy decision meeting were successfully navigated, reducing external uncertainty. With AI semiconductor momentum gaining prominence, sector-specific differentiation in market performance emerged."

On this day, institutional investors purchased net worth totaling 1.4923 trillion won in the KOSPI market (based on Korea Exchange data). Retail investors bought net worth of 2.9789 trillion won, while foreign investors sold net worth of 160.2 billion won. Foreign investors and pension funds showed net buying flows of around 1 trillion won and 3 trillion won respectively during the session but turned to net selling before market close. Other corporations, presumed to be conducting share buybacks for Samsung Electronics and SK Hynix, purchased net worth totaling 1.6585 trillion won.

Among KOSPI sectors, healthcare and precision instruments closed with strong gains exceeding 5%. Distribution, electrical and electronics rose more than 2%, while manufacturing and financial/insurance stocks benefiting from high interest rates gained over 1%. Electricity and gas, pharmaceuticals, and real estate ended with slight gains or flat performance. Chemicals, machinery and equipment, telecommunications, and construction closed with slight declines. Non-ferrous metals, transportation equipment and parts, and metals fell more than 1%.

Among the top market capitalization stocks in the KOSPI, Samsung Electronics rose by over 4%. It is believed that buying pressure entered ahead of the dividend record date on the 29th, prior to the special dividend distribution for the third quarter. Samsung Electro-Mechanics, linked to Samsung Electronics through equity and business relationships, also rose by around 4%. Samsung Electric and Samsung Life Insurance both gained more than 2%. SK Hynix and SK Square closed with slight gains and a rise of around 4%, respectively. KB Financial Group rose by over 1%. Hyundai Motor and LG Energy Solution declined by around 1% and 3%, respectively.

The KOSDAQ closed at 836.27, up 9.15 points (1.11%) from the previous trading day, continuing its fifth consecutive day of gains on a closing basis.

In the KOSDAQ market, retail investors purchased net worth totaling 142.7 billion won. Foreign investors and institutional investors sold net worth of 99.1 billion won and 30.6 billion won, respectively.

Among KOSDAQ sectors, machinery and equipment, and healthcare and precision instruments rose by more than 2%. Electrical and electronics, distribution, manufacturing, telecommunications, and general services gained around 1%. Chemicals, transportation equipment and parts, pharmaceuticals, and IT (information and communications) services closed with slight gains or flat performance. Non-ferrous metals and finance ended with slight declines. Paper and wood declined by around 1%, while construction fell by around 2%.

Among the top market capitalization stocks in the KOSDAQ, strong performance was evident in semiconductor materials, components, and equipment (소부장) stocks. Wonik IPS and IOTech rose by more than 6%. Simtek and HPSP gained around 3% and 1%, respectively. AlteoGen, Rainbow Robotics, and Rino Industrial closed with slight gains or flat performance. EcoPro and EcoPro BM both declined by over 1%.

Experts in the financial investment industry predicted that the domestic stock market may enter a watch-and-wait phase ahead of the Chuseok holiday closure on the 24th and 25. Among issues to watch during the holiday period, the U.S.-China summit scheduled for the 24th (local time) was highlighted. Forecasts suggest that tariff truces, AI, advanced semiconductors, rare earths, and technology hegemony and supply chain issues will emerge as key agenda items.

Han Ji-young, a researcher at Kiwoom Securities, stated, "If this summit concludes at the level of confirming continued AI competition, it could lower the possibility of policy realization for slowing AI development and improve investment sentiment across the entire AI infrastructure, including semiconductors."

He further added, "Given that the domestic stock market will only be open for three trading days due to the Chuseok holiday schedule, there is a possibility that a path of 'expansion of watch-and-wait sentiment → reduction in trading volume → thinning order books and supply-demand gaps' could form." However, he cautioned, "Since this is likely to remain a temporary phenomenon caused by the holiday, it should be avoided to interpret volatility arising from short-term supply-demand gaps as a significant shift in market trends."

On this day, in the Seoul foreign exchange market, the won/dollar exchange rate closed at 1381.0 won, down 2.3 won from the previous trading day's closing price, concluding weekly trading.