South Korea's benchmark KOSPI index rebounded sharply on Monday, closing 2.24% higher at 5,859.08, after opening more than 1.5% lower. The early decline tracked Friday's sell-off on Wall Street, where disappointing guidance from Intel and mixed big tech results weighed on investor sentiment.
The recovery was driven largely by institutional buying, with domestic institutions purchasing a net 1.36 trillion won worth of shares. Retail and foreign investors were net sellers, offloading 43.09 billion won and 1.41 trillion won respectively, underscoring that the rebound was primarily institution-led.
Chip stocks lead the rebound
Semiconductor heavyweights powered the advance. Samsung Electronics rose 1.78% to close at 229,000 won, while SK Hynix gained 3.81% to 1,472,000 won. Both companies are key suppliers of high-bandwidth memory (HBM) used in advanced AI accelerators and data-centre systems.
Shares drew support from bargain hunting and fresh evidence of robust demand for South Korean chip exports. Government data released Monday showed semiconductor shipments jumped 259% year over year in October, reinforcing expectations that AI infrastructure spending continues to underpin the memory-chip industry, even as investors question the scale and profitability of US tech companies' capital expenditures.
President pledges fresh AI investment
Sentiment also received a boost from President Lee Jae Myung, who in a parliamentary address pledged greater investment in artificial intelligence and other future growth industries. Lee proposed allocating 21.3 trillion won ($15.97 billion) to semiconductors, physical AI, and AI data centres—nearly double the previous year's amount.
"We will invest 21.3 trillion won, nearly twice this year's amount, in AI and the three megaprojects of semiconductors, physical AI and AI data centres," Lee said. The allocation is part of a broader budget proposal and signals the government's intent to strengthen South Korea's position in advanced technology and chip manufacturing.
The South Korean economy also grew faster than expected in the third quarter, supported by chip exports and investment, further aiding sentiment. Lee Kyoung-min, an analyst at Daishin Securities, told the Korea Times that last week's negative news had already been priced into Korean markets.
Regional markets and oil prices
Falling oil prices also helped improve sentiment across regional markets. Crude declined amid hopes for progress in Middle East diplomacy, easing concerns over energy supply disruptions and inflation.
Other Asian markets were mostly higher. Hong Kong's Hang Seng Index gained about 0.6%, while China's Shanghai Composite rose 1%. Japan's Nikkei 225 edged down around 0.33%. US stock futures pointed to a firmer Wall Street open, with Nasdaq-100 futures up roughly 0.8%, S&P 500 futures gaining about 0.4%, and Dow futures advancing approximately 0.3%.
This article is for informational purposes only and does not constitute financial advice.
