Korea Market Brief — Samsung and SK hynix buybacks hold up the KOSPI as August exports jump 68.7% (Sept 1)

Seoul spent most of Tuesday looking like it was going to break. The KOSPI opened lower, followed the overnight weakness on Wall Street down to a loss of as much as 1.28% in the morning, and then, with no help at all from the three investor groups that normally decide the direction of the Korean market, turned around in the afternoon and closed green. Retail investors sold. Foreign investors sold. Institutions sold. The index still went up.

The buyer was the companies themselves.

The short version: The KOSPI closed up 0.23% at 6,835.80 because Samsung Electronics and SK hynix bought their own shares — corporate buying absorbed roughly 1.67 trillion won of stock while every other investor group was a net seller. The KOSDAQ, which has no such buyer, fell 1.56%.

What moved the market

The flow data for Tuesday's session is unusual enough to be worth stating plainly. On the KOSPI, including ETFs and related products, retail investors were net sellers of about 440 billion won, foreign investors of about 850 billion won, and institutions of about 373 billion won. That is roughly 1.6 trillion won of net supply from the three groups that are normally described as the market.

Against that, the category the Korea Exchange calls "other corporations" — corporate entities that are not institutional investors — bought a net 1.67 trillion won. That line item is, at the moment, essentially two companies. Samsung Electronics purchased 2 million of its own shares on the open market on Tuesday; SK hynix purchased 650,000.

This is not a one-day phenomenon. Net buying by other corporations first cleared 1 trillion won on August 20, when SK hynix started its buyback, and has run at a daily pace of roughly 1.5 to 1.6 trillion won for seven consecutive sessions since August 24, when Samsung Electronics began its own program. For a week and a half, Korea's two largest listed companies have been the marginal bid in their own market.

What that produces is a very particular kind of tape: sharp morning drops that get absorbed rather than extended. Last Friday the index fell 1.79%. Monday it erased a 3.5% intraday drop to close up 0.46%. Tuesday it erased a 1.28% drop to close up 0.23%. The pattern is consistent — foreign selling sets the opening tone, corporate buying sets the close.

The honest reading is that this supports a floor, not a rally. A buyback is a fixed pool of money executing on a schedule. It can absorb selling; it cannot create demand from investors who have decided to reduce exposure to Korean equities. Local strategists have been making roughly this point all week: shareholder returns underwrite a price floor without guaranteeing gains, which argues for a grinding recovery rather than the kind of vertical move Seoul saw in the first half of the year.

Sector by sector

The split between the two indices tells the story better than any sector table.

Large-cap semiconductors held. Samsung Electronics closed up 0.38% and SK hynix up 1.14%, both having opened lower. Beyond the mechanical support of the buybacks, the memory cycle is doing the work: DRAM contract prices have risen at a historic pace through 2026, with conventional DRAM contract prices up roughly 93–98% quarter-on-quarter in the first quarter and a further sharp increase in the second, as suppliers direct wafer capacity toward HBM and server DRAM and leave the consumer segment short. Korean reporting on Tuesday focused on long-term supply agreements tightening available DRAM further.

The KOSDAQ had no shield. Foreign and institutional selling hit the smaller board with nothing to absorb it, and the index gave up 1.56% to close at 821.25. The damage was concentrated in the two sectors that dominate Korea's small-cap growth complex — biotech and secondary batteries. Alteogen fell 2.11%, HLB 4.35% and Peptron 9.66% among healthcare names; EcoPro dropped 4.49% and EcoPro BM 3.81% in the battery-materials chain.

That divergence is the cleanest illustration available of what the buybacks are and are not doing. They are holding up two stocks with a combined weight large enough to move the headline index. They are doing nothing for the rest of the market. A foreign investor reading only the KOSPI print would conclude Seoul had a quiet, mildly positive day. A domestic retail investor holding KOSDAQ growth names had a distinctly bad one — and the margin loan balance, which topped 33 trillion won, suggests a good deal of that positioning is leveraged.

The won and the macro picture

The won closed at 1,370.4 per dollar, weaker by 1.8 won — a small move, and notable mainly for how little it reacted to what was, on paper, an extraordinary trade report.

South Korea's August exports, released Tuesday, came in at $98.25 billion, up 68.7% year-on-year. Imports rose 22.6% to $63.51 billion, producing a trade surplus of $34.75 billion. The engine is entirely visible: semiconductor exports of $46.65 billion, up 209%, the third consecutive month above $40 billion, driven by hyperscaler spending on AI infrastructure. Petroleum products rose 65.3% to $6.84 billion and petrochemicals 12.2% to $3.86 billion.

Two things deserve emphasis. First, chips are now approaching half of total export value — a concentration that is a strength while memory pricing runs hot and a vulnerability the moment it does not. Second, automobile exports fell 29.8% to $3.85 billion, hit by fewer working days during the summer holiday period and production disruptions. The non-chip export economy is not participating in this boom to anything like the same degree.

On rates, the Bank of Korea raised its policy rate to 3.00% on August 27, a move that sits awkwardly alongside a currency near 1,370 and an economy whose growth is concentrated in one sector. The August consumer price report is due September 2, and local forecasters have been positioning for a print back around the 3% area after a hot summer pushed food and fresh-produce prices up.

Externally, the backdrop was risk-off. US markets closed lower on Monday, August 31 — the S&P 500 down 0.33% at 7,686.14, the Nasdaq Composite down 0.12% at 26,370.89, the Dow down 0.7% at 53,185.90 — after the United States and Iran exchanged fire, pushing crude above $85 a barrel. For a country that imports essentially all of its energy, a sustained oil move is the transmission channel that matters most, both for the trade surplus and for the inflation print due Wednesday.

What to watch next

• September 2 — Korea's August CPI. With the BOK having just hiked, a hotter-than-expected print changes the conversation about how much further the tightening runs.
• The buyback clock. Samsung and SK hynix are executing finite programs. Watching whether the "other corporations" line stays above 1 trillion won a day is the single most useful daily indicator for this market right now.
• Foreign flows. Overseas investors have been persistent net sellers of Korean equities through late August. The buybacks are papering over that; a genuine turn would mean the foreign line flips positive without corporate help.
• Oil and the Middle East. Sustained crude strength pressures the won, the trade surplus, and the inflation path simultaneously.
• Memory pricing. DRAM contract prices are the fundamental case for the KOSPI's two largest stocks. Any sign that the contract-price escalation is decelerating would matter more than any flow statistic.

Seoul is currently a market where the index and the market are two different things. The KOSPI is being held together by two companies buying their own shares; underneath it, the KOSDAQ is bleeding and leverage is elevated. Both facts are true at the same time, and the export data says the fundamental story behind the first one is real. How much of the second one resolves quietly depends on whether foreign investors come back before the buyback money runs out.

This is market information, not investment advice.