South Korean Shares Rebound on Chip Gains

The benchmark KOSPI rose 1.37% to close at 6,718 on Wednesday, snapping a four-day decline amid gains in semiconductor stocks. SK hynix advanced 3.85%, while Samsung Electronics increased 1.81%, helping lift the index despite net foreign selling. Other gainers included Samsung Electro-Mechanics (4.71%), LS Electric (2.05%), Hyosung Heavy Industries (4.28%), and Hanmi Semiconductor (1.35%). Meanwhile, Brent crude traded around $108 a barrel amid escalating Middle East tensions and disruptions to a key Saudi oil pipeline. Higher energy prices could add to inflation and raise costs for Korean companies, which are heavily reliant on imported energy. At the same time, the US 10-year Treasury yield briefly topped 5% for the first time since 2007, increasing concerns over equity valuations and financial conditions. Investors also remained cautious ahead of the Federal Reserve's policy decision, with firm US inflation strengthening rate-hike bets.

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.