Kospi Gains Ground as Chipmakers Surge Amid Easing US Rate Hike Fears

Kospi Gains Ground as Chipmakers Surge Amid Easing US Rate Hike Fears​

South Korean equities saw a significant rebound on Monday, with benchmark indices rising sharply following a rally in global tech stocks. The recovery was particularly pronounced after seven consecutive weeks of decline for the major index. Investor sentiment improved dramatically as concerns regarding sustained high interest rates from the U.S. Federal Reserve began to fade.

Tech Stocks Lead Rally After Seven-Week Slump​

The Kospi advanced 0.80%, closing at 6,308.74 points, or a gain of 49.97 points. This positive movement is largely attributed to the performance of major chipmakers and technology companies across the index. The resurgence in demand expectations for memory chips and artificial intelligence (AI) components provides underlying support to the domestic equity market.

Upcoming earnings reports from international semiconductor and AI-related corporations are expected to mitigate lingering anxieties regarding potential peak demand in these crucial sectors. This anticipated influx of positive financial news is also predicted to improve foreign investor interest in South Korean chip manufacturers following prior week's selling activity.

Global Appetite Rises as Rate Concerns Ease​

The boost to risk assets came primarily from the U.S. stock market, which saw major indexes close at a record high on Friday. This rally was fueled by employment data released from the United States that showed an unexpected decline in job figures last month. This softer labour market evidence reduced expectations for aggressive interest rate increases by the Federal Reserve at its September meeting.

The supportive U.S. macroeconomic backdrop directly benefited South Korean technology stocks, which had been facing heavy selling pressure in the preceding week. The combination of global tech strength and declining expectations of near-term monetary tightening provided a crucial lift to the domestic market.

Key Corporate Movers in South Korean Markets​

Among the major constituents tracked by the Kospi, several companies demonstrated robust performance. SK Hynix gained 1.62%, while Samsung Electronics edged up 0.43%. Hyundai Motor also saw strong advances, rising by 1.77%. In contrast, Kia fell slightly by 0.59%.

Other key stocks reported mixed results; POSCO Holdings was flat, and LG Energy Solution registered no change. Meanwhile, Samsung BioLogics managed a marginal rise of 0.03%, adding diversity to the day's movements. Out of the 910 stocks traded, 630 advanced and 248 declined.

Foreign Selling and Currency Movement Impede Gains​

Despite the rally in technology firms, foreign investment activity presented a notable headwind for the broader market gains. Foreign investors were net sellers of South Korean shares worth $371.75 million (526.4 billion won). This consistent outflow limited the overall upward momentum experienced by the benchmark index.

In currency movements, the South Korean won weakened slightly on the onshore settlement platform. The currency traded at 1,414.7 per dollar, compared to 1,409.5 in the previous session. In the bond market, the most liquid three-year Korean Treasury bond yield held steady at 3.751%. The benchmark 10-year yield also remained stable at 4.198%.