South Korea's KOSPI index surged by more than 8% on Thursday, driven by the suspension of a planned strike at Samsung Electronics and robust earnings from Nvidia in the United States [1][2]. Samsung's union called off its strike after reaching a last-minute agreement with management late on May 20, alleviating investor concerns about potential disruptions at one of South Korea's largest companies [1]. This resolution was a key catalyst for the market rally, as it removed a significant risk overhanging the tech sector [1].
The positive sentiment was amplified by Nvidia's latest quarterly results, which showed 85% year-over-year sales growth to $81.6 billion and a projected revenue of around $91 billion for the current quarter, surpassing the $87.4 billion estimate [2]. Nvidia also reported a 75% gross margin [2]. Despite these strong numbers, Nvidia's shares slipped about 1% in post-market trading after a 1.3% gain the previous day, bringing its year-to-date gain to 19.8% [2]. The muted share reaction did not dampen enthusiasm in Asian markets, where the KOSPI jumped 8.08% and the Nikkei rose 3.58% as investors interpreted Nvidia's performance as a positive signal for the global semiconductor sector [1][2].
Other major Korean tech stocks, including SK Hynix and LG Electronics, were among the top gainers, with analysts describing the market as entering 'virtuous-cycle territory' [1]. The rally in Korean equities was further supported by a broader tech-led rebound in global markets, with the S&P 500 rising 1.08% the previous day, driven by optimism over a potential US-Iran deal, lower Brent crude prices (-5.63%), and a reversal in Treasury yields (-8.1bps on the 10-year) [2].
Market participants noted that the resolution of labor tensions at Samsung and the strong performance of the tech sector could signal further upside for Korean equities if current trends persist [1]. However, while Nvidia's results were impressive, the company's moderate sales guidance beat led to a lukewarm response from some investors [2].
CONCLUSION
The suspension of Samsung's strike and Nvidia's strong earnings report triggered a sharp rally in the KOSPI, reflecting renewed investor confidence in the tech sector. Despite a mixed reaction to Nvidia's guidance, the overall market sentiment remains strongly positive, with analysts suggesting further upside for Korean equities if current trends continue.