South Korean Shares Extend Gains

The benchmark KOSPI rose to around 6,750 on Wednesday, extending gains from the previous session, as semiconductor stocks advanced ahead of Nvidia’s earnings report. Samsung Electronics and SK hynix both gained nearly 1% as US chip stocks rallied overnight, with the Nasdaq rising 0.66% and boosting sentiment toward Korea’s technology sector. Large-cap performance was mixed, with gains from Samsung C&T (3.6%), Shinhan Financial Group (1.5%), and Doosan Enerbility (4.8%), while SK Square (-1.7%) and LG Energy Solution (-1.1%) posted losses. Additionally, lower US Treasury yields supported equity sentiment by easing pressure on technology stock valuations. Falling oil prices and reduced concerns over disruptions in the Strait of Hormuz also eased pressure on South Korea’s import costs. Meanwhile, investors remained cautious ahead of Nvidia’s results, which could influence the broader AI and semiconductor sector.

The benchmark KOSPI rose 0.68% to close at 6,743 on Tuesday, rebounding from the previous session as retail and institutional investors stepped in to buy Korean shares. Large-cap performance was mixed, with SK hynix rising 0.42%, along with Hyundai Motor (1.69%), KB Financial Group (2.02%), and Kia Corporation (2.59%), while Samsung Electronics was flat and SK Square (-1.49%) and LG Energy Solution (-3.45%) posted losses. Investors looked ahead to Nvidia’s earnings report for clues on the outlook for AI-related investments, while concerns over the profitability of AI spending continued to weigh on technology stocks. Foreign investors remained net sellers, offloading KRW 3.82 trillion, while individuals and institutions bought KRW 1.0 trillion and KRW 1.17 trillion, respectively. Meanwhile, sentiment was tempered by geopolitical tensions in the Middle East and uncertainty over the US monetary policy outlook ahead of Fed Governor Kevin Warsh’s speech at Jackson Hole on Friday.

The benchmark KOSPI fell nearly 2% to around 6,570 on Tuesday, extending losses for a second straight session, as a selloff in global technology shares weighed on Korean chipmakers. Samsung Electronics and SK hynix fell more than 3% and 6%, respectively, amid renewed concerns over the profitability of AI-related investments ahead of Nvidia’s earnings report, while reports that US officials were pressing Korean chipmakers to expand investment in American production facilities added to the sector’s weakness. Samsung’s disappointing shareholder-return plan also weighed on the market after its shares plunged on Monday, as investors had expected a larger payout and clearer plans for share buybacks and cancellations. Other notable declines included SK Square (-6.7%), LG Energy Solution (-3.3%), and Hyundai Mobis (-2.3%). Attention now turned to the Bank of Korea’s policy meeting on Thursday, with markets expecting another 25-basis-point rate hike to 3.00% following last month’s 2.75%.