South Korea’s benchmark KOSPI index climbed 2.24% on Monday to close at 5,859.08, recovering from a weak start as investors bought semiconductor stocks after Friday’s sharp sell-off in US technology shares.
The index opened more than 1.5% lower, tracking losses on Wall Street, which had plunged on Friday after disappointing guidance from Intel and mixed big tech results.
However, the early decline in Seoul proved short-lived. Institutional investors bought a net 1.36 trillion won worth of shares, helping the benchmark reverse losses.
Retail and foreign investors remained net sellers, selling 43.09 billion won and 1.41 trillion won respectively, indicating that domestic institutions were the main drivers of the recovery.
Chip stocks lead the recovery
Semiconductor heavyweights led the rebound. Samsung Electronics rose 1.78% to close at 229,000 won, while SK Hynix advanced 3.81% to 1,472,000 won.
Both companies are major suppliers of high-bandwidth memory (HBM), used in advanced AI accelerators and data-centre systems.
Their shares drew support from bargain hunting as well as fresh evidence of strong demand for South Korean chip exports.
Government data showed that the country’s semiconductor shipments jumped 259% year over year in October.
The increase reinforced expectations that AI infrastructure demand is continuing to support the memory-chip industry, even as investors question the scale and profitability of spending by US technology companies.
President pledges fresh AI investment
Sentiment also drew support from President Lee Jae Myung, who pledged greater investment in artificial intelligence and other future growth industries in a speech to parliament on Monday.
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 in an address to parliament.
The allocation forms part of a broader budget proposal and signals the government’s intention 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 on chip exports and investment, helping sentiment.
Lee Kyoung-min, an analyst at Daishin Securities, told Korea Times that the bad news of last week had already been priced into the Korean markets.
Other Asian markets and US futures
Falling oil prices also helped improve sentiment across regional markets. Crude declined amid hopes for progress in Middle East diplomacy, easing some 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. Nasdaq-100 futures rose roughly 0.8%, S&P 500 futures gained around 0.4% and Dow futures advanced approximately 0.3%.
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