South Korean stocks experienced a strong rebound on Wednesday, as the Korea Composite Stock Price Index (KOSPI) surged by 3.29%, closing at 5,735.66. This recovery followed a period of significant losses, driven by easing concerns over spending in the artificial intelligence sector, particularly benefiting semiconductor shares. The rally was supported by positive earnings reports from U.S.-based AI server manufacturer Super Micro Computer, which helped alleviate investor fears regarding the costs associated with AI infrastructure.
The optimism in the market was reflected in the performance of major technology companies. Samsung Electronics saw its shares rise by 5.67% to 223,500 won, while SK hynix gained 5.81% to reach 1.29 million won. SK Corp., the holding company of SK Group, rebounded by 12.62% to 482,000 won after a previous downturn. LS Electric also reported a 7.02% increase to 166,100 won, buoyed by robust third-quarter earnings driven by the demand for power equipment used in AI data centers.
The Korean won also strengthened slightly against the US dollar, trading at 1,325.2, an improvement of 0.8 won from the previous session. This currency strengthening coincided with foreign investors purchasing a net 659.96 billion won worth of South Korean shares, further bolstering the market’s upward momentum.
However, not all sectors fared well. Defense company LIG D&A suffered a significant setback, with shares plunging 9.03% to 498,500 won. This decline followed the South Korean arms procurement agency’s decision to bar the company from bidding on defense contracts for two years due to bribery allegations.
The recovery in South Korean stocks reflects a renewed sense of confidence among investors in the technology sector. Strong corporate earnings have played a pivotal role in mitigating concerns about AI infrastructure investments, instilling a more positive market sentiment.