South Korean stocks experienced a notable rebound on Wednesday, driven by alleviating concerns over the financial demands of artificial intelligence (AI) infrastructure. This recovery follows a previous session marked by sharp losses. The Korea Composite Stock Price Index (KOSPI) rose by 3.29%, closing at 5,735.66 with an increase of 182.92 points. This surge was significant enough to trigger a temporary suspension of program buying on the Korea Exchange after KOSPI 200 futures exceeded a 5% rise, a measure last seen two months ago.
Investor confidence was bolstered by stronger-than-expected earnings from Super Micro Computer, a US-based AI server manufacturer, easing fears around extensive AI spending. This positive sentiment was particularly beneficial for key South Korean tech firms such as Samsung Electronics and SK hynix, with their shares climbing by 5.67% and 5.81%, respectively. SK Corp., the holding company for SK Group, also saw a significant rebound, increasing by 12.62% to 482,000 won after recovering from previous losses.
Additionally, LS Electric’s stock rose by 7.02% to 166,100 won, supported by robust third-quarter earnings spurred by a growing demand for power equipment in AI data centers. However, not all sectors shared in the day’s gains. LIG D&A, a defense company, saw its shares drop by 9.03% to 498,500 won following a ban from South Korea’s arms procurement agency over bribery allegations, preventing it from bidding on defense contracts for two years.
Foreign investors played a significant role in the market’s recovery, purchasing a net 659.96 billion won worth of South Korean shares. Concurrently, the Korean won strengthened slightly against the US dollar, trading at 1,325.2, an improvement of 0.8 won from the last session’s close.
The day’s market movements reflect a renewed investor confidence in the technology sector, as strong corporate earnings help mitigate worries about AI investment burdens and broader market pressures.