South Korean stocks experienced a significant rebound on Wednesday, with the Korea Composite Stock Price Index (KOSPI) climbing 3.29% to close at 5,735.66. The index gained 182.92 points, recovering from previous losses, as concerns over AI spending eased and semiconductor shares saw renewed interest. This rally led to a temporary suspension of program buying by the Korea Exchange when KOSPI 200 futures surged over 5%, a measure not seen in two months.
The improved investor sentiment was attributed to better-than-expected earnings from US-based AI server manufacturer Super Micro Computer, which alleviated fears of excessive spending on AI infrastructure. This positive outlook boosted major South Korean technology firms, with Samsung Electronics seeing a rise of 5.67% to 223,500 won, and SK hynix increasing by 5.81% to 1.29 million won. Additionally, SK Corp., the holding company of SK Group, rebounded by 12.62% to 482,000 won following a sharp decline in the previous session.
LS Electric also benefited from the market’s upward trend, climbing 7.02% to 166,100 won due to robust third-quarter earnings driven by rising demand for power equipment in AI data centers. However, not all sectors shared in the gains; defense company LIG D&A saw a 9.03% drop to 498,500 won after being barred from bidding on defense contracts for two years due to bribery allegations involving South Korea’s arms procurement agency.
Foreign investors contributed to the market’s recovery by purchasing a net 659.96 billion won worth of South Korean shares. Concurrently, the Korean won strengthened slightly against the US dollar, trading at 1,325.2 won, a modest gain of 0.8 won from the previous day’s close.
Overall, the rebound in South Korean stocks reflected a renewed investor confidence in technology shares, spurred by strong corporate earnings that helped mitigate apprehensions surrounding AI infrastructure investments and broader market pressures.