Samsung Electronics Labor-Management Agreement, Nvidia Revenue Surges... KOSPI Soars Over 6%

Samsung Electronics Union and Management Reach Agreement on the Eve of General Strike, Hits 300,000 Won in Pre-market
Nvidia Revenue Surpasses Expectations... Jensen Huang: "AI Infrastructure Advancing at Astonishing Speed"
Buy-side Circuit Breakers Triggered on Both KOSPI and KOSDAQ

On the 21st, the KOSPI started with a sharp rise. The stock price of Samsung Electronics is displayed on the electronic board in the dealing room of Hana Bank, Jung-gu, Seoul. Photo by Yonhap News

The KOSPI surged as Samsung Electronics management and labor reached a dramatic tentative agreement on wage negotiations just one day before a planned general strike. Additionally, Nvidia's first-quarter earnings, which were announced early in the morning, exceeded market expectations and further boosted the Korean stock market.

Samsung Electronics Union and Management Reach Agreement on the Eve of General Strike, Touching All-Time High of 300,000 Won

On the 21st, the KOSPI opened at 7,486.37, up 3.85% from the previous trading day, and continued to climb, trading at 7,652.91 as of 10:08 a.m., a 6.16% increase. The KOSDAQ started the session at 1,085.30, up 2.77%, and is currently trading at 1,114.26, up 5.51%.

With the sharp rally in the stock market, buy-side circuit breakers (sidecars) were triggered on both the KOSPI and KOSDAQ. The KOSPI's buy sidecar was activated at around 9:24 a.m., and the KOSDAQ's at 9:27 a.m. This is the first time since April 8 that both markets have seen buy-side circuit breakers triggered simultaneously.

Leading stocks such as Samsung Electronics and SK hynix are driving the surge in the KOSPI. As of 10:06 a.m., Samsung Electronics is trading at 291,750 won, up 5.71% from the previous day. In the pre-market session, Samsung Electronics also reached an all-time high of 300,000 won. SK hynix is trading at 1,880,000 won, up 7.74%. Other large-cap stocks, including SK Square (5.64%), Hyundai Motor (5.74%), LG Energy Solution (3.38%), Samsung Electro-Mechanics (11.12%), and Samsung Life Insurance (12.82%), are also showing strong gains.

On the 20th, at the Gyeonggi Employment and Labor Office in Jangan-gu, Suwon-si, Gyeonggi-do, after concluding the Samsung Electronics wage negotiations, Yeomyeong Gu, Head of People Team at Samsung Electronics Device Solutions (semiconductor business division), and Seungho Choi, Chairman of the Samsung Electronics Branch of the Samsung Group Supra-Enterprise Labor Union, signed the tentative agreement and shook hands. Photo by Yonhap News Agency

The dramatic signing of a tentative agreement on 2026 wage negotiations between Samsung Electronics management and labor late last night, just one day before the planned general strike, is regarded as a key driver of the market rally. If the strike had gone ahead, Samsung Electronics could have faced tens of trillions of won in losses, but the dramatic agreement appears to have sparked a rebound in the share price. JP Morgan commented, "The dramatic labor-management agreement has removed uncertainty around Samsung Electronics' share price. While the agreed incentive ratio is higher than previous estimates and could act as a downward factor in this year's earnings projections, there is still upside potential compared to market consensus."

The overall rise in the New York stock market overnight and Nvidia's first-quarter results exceeding expectations also had a positive effect on the Korean stock market. The Dow Jones Industrial Average rose 1.31%, the S&P 500 gained 1.08%, and the Nasdaq Composite increased by 1.55%. The Philadelphia Semiconductor Index soared 4.49%. Remarks by U.S. President Donald Trump that negotiations with Iran had entered the "final stage" also supported the stock market's rise, while government bond yields and international oil prices declined.

Nvidia reported that its revenue for the first quarter of its fiscal year (February to April) was $81.62 billion (about 122 trillion won), up 20% from the previous quarter. This represents an 85% surge compared to the same period last year, and it also surpassed the market consensus of $78.85 billion. Jensen Huang, CEO of Nvidia, emphasized, "The construction of AI factories, the largest infrastructure expansion in human history, is progressing at an astonishing pace. Nvidia is the only platform that operates across all clouds, supports all frontier and open-source models, and scales AI production everywhere from hyperscale data centers to edge computing."

Han Ji-young, a researcher at Kiwoom Securities, analyzed, "The tentative agreement in Samsung Electronics' labor-management negotiations has eased strike risks, creating a favorable supply-demand environment for semiconductor stocks. In addition, the stabilization of the U.S. 10-year Treasury yield and Nvidia's strong performance are also positive factors for the Korean stock market."

Foreign Investors Net Sellers on KOSPI for 11 Consecutive Sessions... Outlook for Improvement in Inflows

However, foreign investors continued to be net sellers of about 600 billion won on the KOSPI today. This marks the 11th consecutive session of net selling by foreign investors on the KOSPI. From the beginning of this year up to May 19, foreign investors have been net sellers of approximately 91 trillion won on the KOSPI. This amount is significantly higher than the 62 trillion won in net selling during the global financial crisis in 2008 or the 44 trillion won net selling during the COVID-19 crisis in 2020.

The prevailing analysis in the securities industry is that foreign investors' large-scale net selling is simply profit-taking following the sharp rise in the Korean stock market. Despite continued net selling, the proportion of KOSPI market capitalization held by foreign investors has actually increased. At the start of the year, foreign investors held about 36% of KOSPI's market capitalization, but as of May 19, this figure had risen to about 39%, setting an all-time high. This is because, as the market rises, increases in the market value of major holdings such as Samsung Electronics and SK hynix have outpaced the value of shares sold by foreign investors.

Some analysts predict that the inflection point for a reversal in foreign investor inflows may occur between the end of this month and the middle of next month. In particular, if the Korean market is included on the MSCI Developed Markets Index Watch List, which is scheduled for mid-next month, there is a high possibility that foreign inflows will improve further. Lee Kyungsoo, a researcher at Hana Securities, commented, "If Korea receives a favorable assessment in the MSCI Developed Markets Index Watch List announcement in mid-June, the behavior of foreign investors could change. The probability of Korea receiving a positive evaluation in this announcement is over 60%."

This content was produced with the assistance of AI translation services.