South Korean Stocks Soar as AI Shares Rebound
The Kospi index surged over 16% on Friday, driven by a strong performance in chipmaking and AI-related stocks, mirroring gains on Wall Street.
South Korea's Kospi index experienced a significant rebound on Friday, jumping more than 16% as artificial intelligence-related stocks recovered from earlier weekly losses. This surge mirrored positive movements on Wall Street, with U.S. futures also edging higher.
In early Asian trading, the Kospi saw substantial gains, reaching 16.5% before settling to a 14% increase by midday. Key technology firms were at the forefront of the rally; Samsung Electronics shares climbed 21%, and memory chipmaker SK Hynix soared 24.6%. This recovery followed a downturn earlier in the week, where the Kospi had dropped over 17% amid investor concerns about an artificial intelligence bubble and increasing competition from China.
The market's renewed optimism was bolstered by Microsoft's latest quarterly earnings report, which exceeded expectations. The company's shares surged 15.5%, marking its best day in nearly 18 years and signaling that significant investments in AI are beginning to translate into profits. This performance prompted traders to reinvest in technology stocks that had recently declined.
Despite Friday's substantial gains, the Kospi remains below its June peak of over 9,000. In other Asian markets, Tokyo's Nikkei 225 index climbed 4.4%, with SoftBank Group, an investor in OpenAI, jumping 15%, and chip equipment maker Tokyo Electron rising nearly 11%.
Elsewhere in the region, Taiwan's Taiex surged over 7%, Australia's S&P/ASX 200 added 0.4%, Hong Kong's Hang Seng edged 0.1% higher, and the Shanghai Composite index advanced 0.6%.
On currency markets, the dollar saw a sharp decline against the Japanese yen, with reports suggesting coordinated intervention to support the yen after it traded near 40-year highs. The Bank of Japan maintained its interest rates unchanged, a move that was largely anticipated. Analysts suggest the intervention may have been timed to preempt speculative trading tied to the central bank's policy decisions.
Crude oil prices traded lower, with Brent crude down 1.3% and U.S. benchmark crude down 1.5%. Data indicated a slight increase in oil flows through the Strait of Hormuz, easing some supply pressure, though transit remained limited.
On Thursday, U.S. markets closed with gains, as the S&P 500 rose 1.7%, the Dow Jones Industrial Average added 1.2%, and the Nasdaq composite climbed 2.8%.