South Korea's benchmark Kospi index entered a technical bull market on Thursday, rebounding sharply from last month's historic sell-off amid a global resurgence in artificial intelligence (AI) trade [1]. The Kospi jumped over 4% in early trading, bringing its recovery from the July 30 low to approximately 23%, according to data from LSEG [1]. This rally was led by index heavyweights Samsung Electronics and SK Hynix, which surged more than 4% and 7%, respectively [1].
The renewed investor appetite for technology hardware stocks follows strong earnings reports from global tech giants, which signal continued robust spending on AI infrastructure [1]. Notably, U.S. companies Supermicro and CoreWeave posted better-than-expected results, further fueling optimism and providing a boost to Korean chipmakers whose performance is closely tied to AI-related memory chip demand [1].
Analysts at Fundstrat Global Advisors highlighted that the iShares MSCI South Korea ETF has broken above a key technical level, driven by gains in Samsung Electronics and SK Hynix, which improves the near-term outlook for Korean equities [1]. Mark Newton, Fundstrat's head of technical strategy, noted that memory stocks are beginning to outperform the broader tech sector for the first time since June, describing this as a positive short-term signal for the memory segment within technology [1].
Newton remains bullish on the South Korean market in the near term, though he cautioned that the rally could lose momentum later in the month if U.S. Treasury yields and the dollar rise [1]. For now, the combination of South Korea's rebound and the recovery in memory chips is broadening a rotation back into technology, even as some major U.S. tech names have struggled [1].
CONCLUSION
The Kospi's entry into bull market territory underscores the renewed strength in South Korea's technology sector, led by Samsung Electronics and SK Hynix. Analyst sentiment remains positive in the short term, with expectations for further gains as AI-driven demand boosts memory chipmakers. However, potential headwinds from U.S. market factors could temper the rally's momentum later in the month.