South Korean stocks experienced a significant rebound on Wednesday, driven primarily by alleviated concerns over expenditures in the artificial intelligence (AI) sector. This recovery follows sharp declines in the previous session, with semiconductor stocks leading the charge as investor sentiment improved. The benchmark Korea Composite Stock Price Index (KOSPI) surged by 3.29%, closing at 5,735.66, a gain of 182.92 points.
The rally in the stock market was so pronounced that it triggered a temporary suspension of program buying on the Korea Exchange. This occurred after KOSPI 200 futures saw a rise exceeding 5%, marking the first time in two months such an action was necessary. This uptick in market confidence was largely bolstered by better-than-expected earnings from Super Micro Computer, a U.S.-based AI server manufacturer, which mitigated fears of excessive spending on AI infrastructure.
Major South Korean technology firms benefited from this positive sentiment shift. Samsung Electronics saw its share price rise by 5.67% to 223,500 won, while SK hynix climbed 5.81% to 1.29 million won. SK Corp., part of the SK Group, experienced a notable recovery, advancing 12.62% to 482,000 won after a significant fall in the prior session. Additionally, LS Electric shares increased by 7.02% to 166,100 won, following stronger-than-anticipated third-quarter earnings driven by a surge in demand for power equipment used in AI data centers.
On the other hand, not all sectors fared well. Defense company LIG D&A saw its stock plummet by 9.03% to 498,500 won. This decline came in the wake of South Korea’s arms procurement agency barring the company from bidding on defense contracts for two years due to bribery allegations.
The market’s recovery was further supported by foreign investors, who purchased a net 659.96 billion won worth of South Korean shares. The Korean won also showed strength, trading at 1,325.2 against the US dollar, an improvement of 0.8 won from the previous session’s close.
Overall, the rebound in the South Korean stock market reflects renewed confidence in technology stocks amidst strong corporate earnings, which have helped ease concerns regarding investments in AI infrastructure and broader market pressures.