KOSPI Surges a Record 17.9% as Samsung and SK Hynix Rebound After Microsoft's Blockbuster Earnings Beat

South Korea's benchmark KOSPI index staged the largest single-day rally in its history Friday, surging 17.91% to close at 6,595.45, as chipmaking giants Samsung Electronics and SK Hynix rebounded sharply from a punishing weeklong selloff following blowout earnings results from Microsoft, Amazon and Meta Platforms.

The index closed up 1,001.89 points, marking a record in both point and percentage terms, according to the Korea Herald. The rally briefly pushed the KOSPI as high as 6,547.56 during the session, a 17.06% intraday gain, before the index extended even further into the close. The previous record for a single-day percentage gain had stood at 11.95%, set on October 30, 2008, during the depths of the global financial crisis, according to the Seoul Economic Daily.

Semiconductor shares drove the bulk of Friday's advance. Samsung Electronics surged as much as 26.81% during the session, while SK Hynix climbed 29.95%, according to figures reported by TradingKey, effectively hitting the exchange's daily limit for individual stock price movements. The tech-heavy KOSDAQ index also posted a historic gain, closing up 11.63% at 719.76, marking its second-largest daily percentage gain on record, according to the Korea Herald.

The rally traced its origins directly to a powerful overnight session on Wall Street. Microsoft's shares soared 15.5% Thursday for the company's best single-day performance in nearly 18 years, according to the Associated Press, after the technology giant reported that its Azure cloud computing division grew 43% during the quarter, easing investor concerns about the sustainability of massive capital spending on artificial intelligence infrastructure. Amazon and Meta Platforms also posted upbeat results that reinforced expectations that AI-related spending remains robust, according to CNBC. The tech-heavy Nasdaq 100 climbed more than 3% Thursday, snapping a six-day losing streak, while the broader Philadelphia Semiconductor Index posted its strongest single-day advance in more than a year.

Friday's rebound followed a brutal stretch for Korean equities. The KOSPI had plummeted more than 17% over the three trading sessions preceding Friday, driven by investor concerns about a potential bubble in artificial intelligence valuations and intensifying competition from Chinese chipmaking rivals, according to the Associated Press. At one point during that selloff, the index had fallen roughly 40% from its June peak, wiping out nearly $2 trillion in market value, according to reporting from the Private Banker.

Foreign investors were the driving force behind Friday's historic rebound, posting net purchases of 7.25 trillion won, or roughly $5.06 billion, on the KOSPI, according to the Korea Herald. That marked a second consecutive day of net foreign buying, following four straight sessions of net selling that had preceded Thursday. Before that two-day buying streak began, foreign investors had sold a net 18.5 trillion won worth of Korean stocks during July alone, on top of nearly 51 trillion won in net sales during June. Institutional investors, who began Friday's session as net sellers, reversed course around midday and ended the day with net purchases of 1.15 trillion won. Retail investors, by contrast, took profits following the recent volatility, selling a net 8.26 trillion won worth of shares.

Additional factors beyond the Microsoft-driven rally appeared to reinforce Friday's gains. SK Group Chairman Chey Tae-won disclosed purchases of SK Hynix shares during the recent selloff, a move that bolstered investor confidence in the world's second-largest memory chipmaker, according to CNBC. New cash-deposit requirements for investors using leveraged exchange-traded funds also took effect July 31, a regulatory change some analysts said may have contributed to a broader repositioning among traders active in that corner of the market. Short-covering and mechanical rebalancing tied to leveraged ETFs were also cited as amplifying factors behind the scale of Friday's move.

Despite the historic single-day gain, market analysts urged caution about reading too much into the rebound. Speaking to CNBC, one analyst identified only as Jung said foreign investors appeared to be the primary force behind Friday's rally, but cautioned against assuming the gains signal a durable trend reversal. "I would not expect gains of this magnitude to continue," Jung said, adding that asset prices had become "completely disconnected" from underlying fundamentals during the recent volatility.

Even after Friday's rally, the KOSPI remained well below its levels from earlier in the year. The index recorded its worst monthly performance since 1997, dropping 22.19% over the course of July, according to TradingKey, underscoring that Friday's rebound, while historic in scale, only partially offset the scale of losses the index had absorbed over the preceding weeks.

South Korean authorities also announced new measures Friday aimed at supporting the country's technology and artificial intelligence sector more broadly. The government said it would inject a minimum of 20 trillion won, or approximately $13.9 billion, into the Korea Investment Corporation for strategic investments in artificial intelligence, data centers and broader infrastructure, according to the Private Banker, marking the first time the sovereign wealth fund's mandate has been expanded to include domestic assets.

Japan's Nikkei 225 index also posted a strong rebound Friday, rising 4.03% to close at 64,362.02, according to TradingKey, as the broader rally in technology and semiconductor shares extended across Asian markets. With both the KOSPI and Nikkei having now demonstrated the capacity for dramatic swings in both directions over a single week, investors are likely to watch closely in the sessions ahead for signs of whether Friday's rebound marks a genuine stabilization in sentiment toward AI-linked technology stocks or another temporary swing within a period of extraordinary volatility across the sector.