Kospi Jumps on Reviving AI Sentiment, Nears Technical Bull Market
Forecast Trend Report by Period
South Korean stocks staged a sharp rebound on August 13 as improving sentiment around artificial intelligence pushed the Kospi to the brink of a technical bull market.
The Kospi rose as much as 4.8% intraday, leaving it about 22% above its July 30 low. Major indexes are typically considered to have entered a technical bull market when they climb more than 20% from a recent trough.
Bloomberg said Samsung Electronics Co. and SK Hynix Inc. led the advance. Both stocks gained more than 5% during the session, driving the broader index higher.
Investors pointed to global big tech earnings for reaffirming plans to expand AI spending, a sign that helped improve sentiment toward semiconductor shares. Recent government steps to tighten rules on single-stock leveraged exchange-traded funds, along with a decline in margin trading, also helped stabilize the market.
Kang Dae-kwon, chief executive officer of Life Asset Management, said the market had fallen excessively during the unwinding of leveraged positions and is now seeing a natural rebound as fund flows stabilize. Still, he said, it remains unclear whether the rally can continue before expectations for AI investment and the U.S. rate environment become more stable.
U.S. consumer price index data for July matched market expectations, easing concerns about additional Federal Reserve rate increases and supporting sentiment toward chip stocks. Expectations that Samsung Electronics and SK Hynix will announce shareholder return policies have also supported the market in recent days.
The Kospi has risen more than 60% this year, but it remains about 24% below its June peak. Foreign investors have been net sellers of more than $100 billion this year, though some overseas funds appear to be returning as the recent share-price correction has made valuations more attractive.
Investors are also betting that demand for memory chips will continue to grow as AI services spread. Chian Zhang, an emerging-markets equities specialist at Baillie Gifford, said demand for memory is surging with the spread of AI agents and physical AI, while supply capacity remains limited. Few companies globally can resolve that bottleneck, he said.
