AI frenzy fuels record-breaking rally in South Korean tech stocks, Kospi surges nearly 7%
TOKYO (AP) — South Korea’s benchmark Kospi index shattered records on Wednesday, soaring nearly 7% to close at 7,398.34, as a wave of buying in tech shares — led by Samsung Electronics — lifted the market to unprecedented heights. The rally was powered by surging expectations around artificial intelligence growth and cautious optimism over a potential de-escalation in the U.S.-Iran conflict.
Samsung Electronics, the heavyweight of the Kospi, saw its shares jump nearly 13%, while SK Hynix, another major player in the memory chip sector, surged 10% in early trading. Both companies are key suppliers of high-bandwidth memory and other chips critical for AI applications, making them direct beneficiaries of the global AI investment wave.
“We’re seeing a perfect storm for Korean semiconductors,” said Park Ji-hoon, a Seoul-based market analyst at Hanwha Investment & Securities. “AI demand is not a fad — it’s reshaping the entire supply chain, and Korean chipmakers are sitting at the center of it.”
Market sentiment was further lifted by reports that Iranian officials were heading to China ahead of a planned summit between U.S. President Donald Trump and Chinese leader Xi Jinping. The diplomatic signals helped calm volatility in oil markets, with Brent crude slipping to $108.37 a barrel, down from earlier highs but still well above pre-conflict levels near $70.
“It’s ridiculous how much of this rally is built on hope and hype,” said Kim Soo-yeon, a retail investor in Seoul who has been trading tech stocks for years. “Everyone’s acting like AI is going to solve world hunger. Meanwhile, oil prices are still through the roof and the Strait of Hormuz is a mess. But hey, the charts look good, so let’s keep buying, right?”
South Korean markets were closed Tuesday for a public holiday, and the catch-up rally on Wednesday pushed the Kospi well past its previous record. The broader Asian market also saw gains: Australia’s S&P/ASX 200 rose nearly 1.0% to 8,766.80, Hong Kong’s Hang Seng added 0.7% to 26,081.52, and the Shanghai Composite climbed 1.0% to 4,152.68. Tokyo markets were closed for a holiday.
In the U.S., the S&P 500 rose 0.8% to a fresh all-time high of 7,259.22, while the Nasdaq composite also set a record, climbing 1% to 25,326.13. The Dow Jones Industrial Average added 0.7% to 49,298.25. Mixed economic data — including a slowdown in services sector growth and a slight uptick in job openings — did little to dampen investor enthusiasm.
“The market is laser-focused on AI and geopolitics right now,” said Lee Jae-won, a fund manager at KB Asset Management. “The fundamentals are still messy, but when you have two of the biggest tailwinds — tech innovation and potential peace talks — converging, investors are willing to look past the noise.”
In currency markets, the U.S. dollar edged down to 157.88 Japanese yen, while the euro rose to $1.1720. Oil prices remained elevated but stable, with U.S. crude slipping to $100.90 a barrel. U.S. military leaders have indicated a ceasefire with Iran is in effect, though uncertainties persist, particularly regarding shipping routes in the Strait of Hormuz.
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AP Business Writer Stan Choe in New York contributed to this report.