South Korean Shares Climb as Chip Stocks Rally

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.

The benchmark KOSPI fell 0.25% to close at 7,034 on Thursday, reversing gains from the previous session amid surging oil prices and higher US Treasury yields. Brent crude rose above $101 a barrel, its highest level since May, as escalating US-Iran tensions raised concerns over Middle East energy disruptions, adding to inflation concerns and uncertainty over monetary policy. The US 10-year Treasury yield also climbed to its highest level since November 2023, while Wall Street stocks fell for a third straight session, weighing further on Korean shares. Large-cap performance was mixed, with losses in LG Energy Solution (-1.21%), Samsung Biologics (-1.72%), Doosan Enerbility (-1.42%), and HD Hyundai Heavy Industries (-1.19%), while SK hynix edged up 0.16% and Samsung Electronics was flat. Meanwhile, South Korea and France agreed to strengthen cooperation in AI and semiconductors, including joint research and investment, offering some longer-term support for Korea's technology sector.