Kospi Jumps 3.6%, Reclaims 6,800 as Softer US Inflation Boosts AI Sentiment
Summary
- Softer US consumer inflation in July reduced the odds of a rate increase, helping the Kospi extend its rally to a fourth straight trading day.
- A recovery in AI-related investment sentiment and firm AI infrastructure demand in the US stock market lifted South Korean semiconductor shares and materials, parts and equipment makers.
- Foreign investors were net buyers of 2.4439 trillion won and institutions bought a net 791.5 billion won, while retail investors were net sellers of 3.1591 trillion won as they took short-term profits.
Forecast Trend Report by Period
As chances of another US rate hike recede
Index tops 6,800 after four straight gains
Foreign investors buy a net 2.4439 trillion won; institutions also net buyers
South Korea’s Kospi rose more than 3% for a second straight session and reclaimed the 6,800 level as softer US inflation revived sentiment for artificial intelligence-related stocks.
The Kospi closed 3.56% higher at 6,813.34 on August 13. After gaining 3.68% a day earlier, the index has risen for four straight sessions since August 10, reaching its highest level in 15 trading days since July 23, when it ended at 7,096.89. It marked the first four-session winning streak since early June. The benchmark climbed more than 4% early in the session and rose as high as 6,895.63 before trimming some gains. All 10 of the market’s largest stocks by capitalization ended higher. Samsung Electronics advanced 4.89% and SK Hynix gained 5.92%, while SK Square jumped 9.08% and Samsung Electro-Mechanics surged 12.58%.
The Kosdaq rose 0.29% to 861.37, extending its own winning streak to four sessions. Semiconductor materials, parts and equipment makers posted relatively strong gains, with Wonik IPS up 7.62% and Jusung Engineering rising 3.05%.
South Korean stocks advanced after risk appetite improved on Wall Street overnight. Despite rising tensions in the Middle East, US consumer prices and core inflation both slowed in July from the previous month, to 3.4% and 2.5%, respectively, lowering the perceived odds of another Federal Reserve rate increase. CME FedWatch showed a 59.9% probability that the Fed will leave interest rates unchanged in September. In US trading, earnings from Nebius, following results from CoreWeave and Supermicro, reinforced solid demand for AI infrastructure. Micron rose 4.9%, SanDisk gained 5.8% and Nvidia added 3.0%, helping drive gains in South Korean semiconductor shares.
Foreign investors extended their net buying streak to three sessions. Data from the Korea Exchange and Nextrade showed foreign investors bought a net 2.4439 trillion won worth of shares on the Kospi on August 13. That was down from 3.4907 trillion won a day earlier, but the buying continued. Institutional investors were also net buyers, purchasing 791.5 billion won. Retail investors sold a net 3.1591 trillion won as they took short-term profits.
“The favorable momentum in US semiconductor stocks spread to South Korea’s chip sector, with both large-cap chipmakers and materials, parts and equipment companies posting strong gains,” Lee Kyung-min, an analyst at Daishin Securities, said. Strength across the AI infrastructure value chain was also evident, he added, with IT hardware stocks advancing as well.
Kang Jin-kyu, Hankyung.com reporter josep@hankyung.com
Korea Economic Daily
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