South Korean Shares Near 3-Week High

The benchmark KOSPI rose nearly 4% to around 6,830 on Thursday, extending gains to its highest level in almost three weeks, as major chipmakers rallied following an overnight rise in US technology stocks. Samsung Electronics climbed more than 4%, and SK hynix surged over 7%, as renewed optimism over AI-related demand lifted sentiment across the semiconductor sector. Strong gains were also recorded in SK Square (9.0%), Hyundai Motor (3.4%), LG Energy Solution (2.1%), Hanwha Aerospace (2.9%), HD Hyundai Heavy Industries (1.0%) and Kia Corporation (1.7%). 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.

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.