The KOSDAQ, which had tumbled to the 700 level, recovered its losses in a single day and climbed back above 800. As the view spread that the recent decline was excessive, large-scale bargain hunting by institutional investors helped frozen investor sentiment regain stability.
As of 10 a.m. Wednesday, the KOSDAQ stood at 805.45, up 20.45 points (2.61%) from the previous day. Buying poured in from the opening bell, pushing the index past 800 as it attempts to hold that level. Individual investors and foreign investors are net selling 73.4 billion won and 35.9 billion won, respectively, but institutions alone are buying 109 billion won, driving the index higher.
The previous day, the KOSDAQ closed at 785.00, down 5.56%. The index has fallen more than 10% in July alone, surrendering the 800 level. It was the first close below 800 in 10 months, since Sept. 4 last year. The KOSDAQ, which gave up the 1,000 level on June 18, plunged as much as 6.32% at one point the previous day, triggering a sell-side sidecar, a temporary halt on program trading. Its market capitalization also slipped to 432.9499 trillion won.
Wednesday's rebound is being led by semiconductor materials, parts and equipment stocks. Among large-cap names, Eugene Technology (084370.KQ) rose 8.58%, FADU (440110.KQ) 9.12%, HPSP (403870.KQ) 6.01%, Simmtech (222800.KQ) 6.12%, Jusung Engineering (036930.KQ) 7.13% and Wonik IPS (240810.KQ) 4.38%, all posting strong gains. Back-end processing and equipment stocks, which had been sidelined amid the concentration in large caps, appear to be absorbing bargain-hunting demand. Robot stocks are also showing notable strength. Robotis (108490.KQ) jumped 7.51%, and Rainbow Robotics (277810.KQ) climbed 4.55%, adding to the market's rebound.
Biotech stocks show a divergence across names. D&D Pharmatech (347850.KQ) gained 9.25%, Voronoi (310210.KQ) 5.93% and Samchundang Pharm (000250.KQ) 5.50%, posting gains approaching double digits and leading the strength, while sector leader Alteogen (196170.KQ) rose only 0.32%, with limited upside. Leading battery stocks EcoPro (086520.KQ), up 4.36%, and EcoPro BM (247540.KQ), up 2.66%, are also continuing a modest climb.
Analysts share the view that the recent KOSDAQ decline was excessive and expect a rotation of funds into neglected KOSDAQ sectors after KOSPI leaders peak. "The decline has been excessive, and semiconductor companies' growth remains solid, so the downtrend will not continue," said Hwang Seung-taek, head of the research center at Hana Securities.
Policy momentum in the second half is another source of optimism. However, some point out that a clear rotation of funds from the KOSPI to the KOSDAQ has yet to materialize. Others say a recovery in trading value is key for the rebound to turn into an actual trend reversal. Given that KOSDAQ trading value shrank to its lowest level this year the previous day, how consistently buying flows in is expected to serve as a gauge of the market's future direction. "With stimulus measures such as the execution of the National Growth Fund and the launch of the KOSDAQ Premium Index scheduled in large numbers for the second half, the momentum remains valid," said Jung Na-young, an analyst at Woori Investment Securities.
