South Korean stock prices experienced a significant jump on Friday, marking a partial recovery from a three-day sell-off that had wiped hundreds of billions of dollars from the market’s valuation. The benchmark Kospi index closed nearly 18% higher, propelled by strong performances from major chip manufacturers SK Hynix and Samsung Electronics.
AI Optimism Fuels Rebound
The rebound was partly attributed to positive earnings reports from U.S. technology giants Amazon and Microsoft, which bolstered investor optimism regarding substantial investments in artificial intelligence (AI). These positive signals from global tech leaders provided a much-needed boost to South Korea’s tech-heavy market.
Chip Stocks Lead the Charge
SK Hynix, a key supplier to AI chip leader Nvidia, saw its shares climb by almost 30%. Samsung Electronics followed suit, with its stock rising by 28%. Both companies had been significantly impacted by the preceding three-day rout, which saw a broader sell-off in AI-related stocks deepen.
The recent volatility in South Korea’s stock market has been notable, attracting a large influx of retail investors. The Kospi index has been halted multiple times this year due to circuit breaker mechanisms designed to temper panic selling. Despite recent declines from a mid-June record high, the index remains over 50% higher than its end-2025 level.
Regulatory Support and Regional Impact
In addition to the positive earnings news, South Korean regulators have also announced measures aimed at curbing the recent sell-off. The rally in chip stocks also had a positive spillover effect on markets in Japan and Taiwan, indicating a broader regional recovery in the tech sector.
The surge in AI-related companies’ shares followed Amazon’s more than 9% jump and Microsoft’s over 15% gain in after-hours trading in New York on Thursday, demonstrating the significant impact of these earnings reports on global investor sentiment.
