South Korean Shares Rally on Tech Rebound

The benchmark KOSPI fell 0.85% to close at 6,627 on Tuesday, extending its decline for a fourth straight session, as concerns over a slower pace of AI development contributed to a selloff in global technology stocks, weighing on the broader market. Nvidia fell 3%, while Broadcom and AMD dropped more than 4% overnight, raising concerns over the pace of AI investment and semiconductor demand. Losses were recorded in Samsung Electronics (-0.60%), SK hynix (-0.53%), Hyundai Motor (-1.08%), KB Financial Group (-3.25%), Hanwha Aerospace (-6.51%), HD Hyundai Heavy Industries (-5.43%), and Shinhan Financial Group (-2.36%). Additionally, the US 10-year Treasury yield briefly touched its highest level since October 2023 ahead of the Federal Reserve’s policy decision this week, weighing on growth stocks. At the same time, oil prices remained above $100 a barrel amid escalating Middle East tensions after Saudi Arabia shut a key pipeline, keeping inflation and input-cost concerns elevated.

The benchmark KOSPI fell 3.26% to close at 6,684 on Monday, extending losses for a third straight session, as renewed concerns over the sustainability of the AI investment cycle weighed heavily on semiconductor shares. SK hynix plunged 6.35%, and Samsung Electronics slipped 4.05%. SK Group Chairman Chey Tae-won warned that heavy AI investment could become a bubble if capital and resources fail to generate sufficient returns. Other notable decliners included SK Square (-8.17%), Samsung Electro-Mechanics (-4.50%), Hyundai Motor (-2.88%), LG Energy Solution (-2.36%), Doosan Enerbility (-4.19%), Kia Corporation (-1.90%), and Hyundai Mobis (-3.73%). Additionally, escalating Middle East tensions pushed oil prices above $100 a barrel after a vessel was struck in the Strait of Hormuz and Saudi Arabia shut its East-West crude pipeline following drone attacks, fueling concerns over further supply disruptions and higher energy costs for South Korea.

The benchmark KOSPI fell 1.76% to close at 6,910 on Friday, extending losses from the previous session amid surging oil prices and higher US Treasury yields. WTI climbed above $100 per barrel, while Brent topped $107 amid escalating US-Iran tensions, raising concerns over inflation and further disruptions to oil supplies. Additionally, the US 10-year Treasury yield rose to its highest level since October 2023, while rate-hike bets for next week’s Fed meeting strengthened. Samsung Electronics (-3.44%) and SK hynix (-2.21%) led the decline, alongside losses in SK Square (-4.05%), Hyundai Motor (-1.67%), and LG Energy Solution (-1.37%). Separately, the BOK signaled that it will assess the timing and pace of further rate hikes as inflation remains above target, with CPI accelerating to 3.1% in August. Meanwhile, South Korea’s exports surged 83% year-on-year in the first 10 days of September, led by semiconductor shipments that jumped 270% amid robust AI demand.