South Korean Shares Climb as Chip Stocks Rally

The benchmark KOSPI rose more than 4% to around 6,600 on Wednesday, extending gains for a third straight session, led by major technology stocks. Samsung Electronics jumped nearly 8%, and SK hynix climbed over 7%, 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 (10.1%), Hyundai Motor (1.7%), LG Energy Solution (2.0%), Hanwha Aerospace (5.2%), and Doosan Enerbility (3.2%). 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.

The benchmark KOSPI rose 0.73% to close at 6,346 on Tuesday, extending gains from the previous session, supported by plans to accelerate AI-related investment. The government plans to enact a special law this year to streamline the implementation of AI investment projects, including a semiconductor cluster backed by combined investment commitments of 800 trillion won from Samsung Electronics and SK hynix. Sentiment was also supported by strong semiconductor exports, which surged 155.4% year-on-year in the first 10 days of August to $9.95 billion amid robust global AI demand. Meanwhile, gains were tempered by overnight weakness in US technology stocks and higher oil prices amid uncertainty over the reopening of the Strait of Hormuz. Large-cap performance was mixed, as Samsung Electronics jumped 4.02% and SK hynix rose 0.70%, while Hyundai Motor (-1.10%), LG Energy Solution (-3.67%), KB Financial (-2.56%), Hanwha Aerospace (-4.69%), and HD Hyundai Heavy Industries (-5.45%) posted losses.

The benchmark KOSPI edged up 0.65% to close at 6,300 on Monday, rebounding from the previous session as optimism over AI-related investment supported market sentiment. President Lee Jae Myung urged the government to accelerate AI-related investment projects, including a semiconductor cluster backed by combined investment commitments of 800 trillion won from Samsung Electronics and SK hynix. The index also tracked Wall Street's record-setting performance after a weaker-than-expected US jobs report eased expectations of a September Federal Reserve rate hike. Notable gainers included SK Square (+1.17%), Hyundai Motor (+3.29%), LG Energy Solution (+2.08%), Hanwha Aerospace (+5.38%), HD Hyundai Heavy Industries (+5.34%), and Doosan Enerbility (+3.63%), while SK hynix inched up 0.42%. Meanwhile, tighter restrictions on leveraged ETFs tracking major chipmakers reduced speculative demand for large-cap technology stocks, limiting gains in the KOSPI.