South Korea's KOSPI Surges Over 16% as Chip Stocks Rebound on Wall Street Cues

South Korea’s benchmark KOSPI index surged more than 16% on Friday, staging a dramatic recovery from a steep weekly sell-off, as heavyweight technology stocks rallied on the back of a strong overnight performance on Wall Street.

Chipmakers Lead Rebound

The KOSPI was trading 16.5% higher at 6,513.45 points by 01:10 GMT, according to a report from Investing.com. The move nearly erased a slump of almost 17% over the previous three sessions that had pushed the index to a low of 5,262.77 points earlier in the week.

Leading the rebound were the country's largest chipmakers:

• Samsung Electronics (KS:005930) shares jumped over 21%.
• SK Hynix (KS:000660) shares skyrocketed more than 26%.

Catalyst from U.S. Tech

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The rally in Seoul followed a sharp rebound in U.S. markets, where technology shares led gains. Investor confidence was reignited by stronger-than-expected quarterly earnings from Microsoft (NASDAQ:MSFT), which eased concerns about the returns on heavy artificial intelligence infrastructure spending.

The U.S. tech giant's results, featuring strong growth in its Azure cloud division, provided a positive catalyst that spilled over into Asian trading sessions, renewing optimism in the semiconductor sector.

Context: A Volatile Week

Friday's surge marks a sharp reversal from the bearish sentiment that dominated the market earlier in the week. The preceding sell-off was reportedly triggered by concerns over rising competition from Chinese memory chip manufacturers and profit-taking after a significant AI-driven rally in semiconductor stocks.

That negative sentiment had overshadowed strong quarterly results from both Korean chipmakers. Samsung had recently posted a record quarterly profit, while SK Hynix reported record revenue, though its profit fell short of high market expectations.