On July 31, the Korea Composite Stock Price Index (Kospi) staged a powerful rebound in Friday's trading session, fueled by robust earnings reports from major US technology companies. This rally marked the end of a three-day losing streak for the South Korean market, partially recovering hundreds of billions of dollars in market value that had been wiped out by a recent sell-off.
Data indicated that the Kospi surged nearly 17% during Friday's midday trading session, driven by the strong performance of chipmaking giants SK Hynix and Samsung Electronics. SK Hynix, a key supplier to global AI chip leader Nvidia, saw its stock price skyrocket over 17%, while Samsung Electronics posted a gain of 23%. This robust movement also lifted stock markets in Japan and Taiwan.
Earlier in the week, global AI-focused stocks had experienced a deep sell-off, triggered by concerns about the return on investment from massive capital expenditures by major technology companies in the artificial intelligence sector. The market value of SK Hynix and Samsung Electronics had been significantly reduced during this period. The turnaround came after US tech giants Amazon and Microsoft released earnings reports that exceeded expectations. In after-hours trading on Thursday, Amazon shares surged more than 9% on the New York Stock Exchange, while Microsoft gained over 15%. These financial results revitalized market confidence in the prospects of AI investment.
In recent months, the volatility of the South Korean stock market has increased significantly, driven by a massive influx of retail investors. To curb the panic selling seen this week, South Korean regulators have announced targeted intervention measures. According to statistics, the stock market's "circuit breaker" mechanism, designed to stabilize market sentiment, has been triggered multiple times this year, leading to temporary trading halts.
Although the Kospi has undergone a series of significant corrections after hitting an all-time high in mid-June, it still remains approximately 50% above its year-end 2025 level, thanks to a doubling in value during the first half of the year.