KOSPI Rallies Over 6% on Tariff Pause

The benchmark KOSPI climbed 2.42% to close at 6,978 on Friday, extending gains to its highest level in more than three weeks, as strength in US stocks and semiconductor shares lifted investor sentiment. The S&P 500 reached a fresh record high after US producer prices were unchanged in July, below expectations for an increase, easing concerns over accelerating inflation and reducing expectations for further Federal Reserve tightening. The improved risk sentiment supported Asian technology stocks, with SK hynix jumping 3.26% and Samsung Electronics advancing 2.43%. Other notable performers included SK Square (3.31%), Hyundai Motor (8.24%), LG Energy Solution (1.09%), HD Hyundai Heavy Industries (2.82%), Kia Corporation (3.13%), and Hyundai Mobis (7.05%). Meanwhile, the US imposed a 15% tariff on South Korean drones and components and identified South Korea as a Tier 1 economy exposed to transshipment risks involving China-linked goods, adding a potential headwind for exporters.

The benchmark KOSPI rose 3.56% to close at 6,813 on Thursday, extending gains to its highest level in three weeks, as major chipmakers rallied following an overnight rise in US technology stocks. Samsung Electronics climbed 3.72%, and SK hynix surged 5.92%, as renewed optimism over AI-related demand lifted sentiment across the semiconductor sector. Strong gains were also recorded in SK Square (9.08%), Hyundai Motor (2.20%), LG Energy Solution (1.95%), Hanwha Aerospace (2.51%), KB Financial Group (1.27%), Shinhan Financial Group (2.70%), and Hyundai Mobis (2.51%). Additionally, an in-line US inflation reading reduced expectations for a September Federal Reserve rate hike, further supporting risk appetite and technology shares. Separately, the South Korean government’s plan to ease regulations for semiconductor and AI megaprojects, expected to generate KRW 4.2 trillion in investment, provided an additional positive backdrop.

The benchmark KOSPI rose 3.68% to close at 6,579 on Wednesday, extending gains for a third straight session, led by major technology stocks. Samsung Electronics jumped 6.68%, and SK hynix climbed 5.30%, with both shares extending gains following a report that Singapore's Temasek Holdings is considering direct investments in the chipmakers. Expectations of increased shareholder returns and strong AI-related demand also supported sentiment. Other notable gainers included SK Square (8.57%), Hyundai Motor (1.49%), LG Energy Solution (1.13%), Hanwha Aerospace (5.46%), and Doosan Enerbility (3.21%). Investors also looked ahead to the US July inflation report, with a softer-than-expected reading potentially easing concerns over a September Federal Reserve rate hike. Meanwhile, renewed tensions in the Middle East posed a risk after hopes for a potential US-Iran peace deal faded, while the continued closure of the Strait of Hormuz pushed US crude prices above $83 a barrel.