South Korean equities jump 6% as memory-chip giants build on gains

South Korean shares surged 6% on Wednesday, as investors rotated back into AI plays ahead of major tech and chip earnings in the US after last week’s sharp selloff wiped billions off the sector.

The benchmark KOSPI was up 316.67 points, or 4.69%, at 7,064.62 as of 0341 GMT, after climbing as much as 6.2% earlier in the day. The junior Kosdaq index advanced almost 5%.

The KOSPI exchange enforced a temporary suspension of program trading called “sidecar”, triggered when the benchmark moves 5% on either side, the 11th such curb in 15 trading days this month.

It highlighted the heightened volatility in the market, weighted in favour of rival chipmakers Samsung Electronics and SK Hynix at the heart of the global AI trade.

A Wall Street overnight rebound set the stage for Wednesday’s jump: the tech-heavy Nasdaq Composite edged higher, while the Philadelphia SE Semiconductor Index jumped more than 5% for its best session in five weeks.

Results from Alphabet and chipmakers Intel and Texas Instruments are expected to provide a readout on the health of the AI and semiconductor sectors.

“After the sharp decline in share price, largely driven by valuation, the positioning heading into major tech earnings should be less crowded,” Jason Lui, Head of APAC Equity Derivative Strategy, BNP Paribas, said.

That will allow investors to “better evaluate the growth outlook of the companies from a fundamental perspective,” Lui said.

On KOSPI, SK Hynix, the world’s leading AI memory chipmaker, soared more than 9%, while Samsung Electronics advanced 6.6%, building on their gains from the previous session.

“Without these two companies, we would suggest that there is not much in the South Korean equity market to be excited by, at least from a longer-term earnings growth point of view,” said William Bratton, head of cash equity research, APAC, BNP Paribas.

“The two most exciting companies in South Korea are also some of its most volatile, which creates risks for longer-term investors who are typically implementing buy-and-hold strategies.”

In other stocks, Hyundai Motor and sister automaker Kia Corp climbed as much as 7.14% and 3.11%, respectively.

Battery maker LG Energy Solution added 3.8%. Of the total 915 traded issues, 692 shares advanced, while 194 declined.

Foreign investors bought a net 2.01 trillion won ($1.36 billion) worth of shares, and have poured 2.71 trillion won over the past week through Tuesday.

The won was last quoted at 1,483 per US dollar on the onshore settlement platform, after rising to as much as 1,471 a dollar the previous day.