Seoul's KOSPI Holds Above 7,000 as Chip Rally Offsets $100 Oil and Middle East Tensions

SEOUL — South Korea's benchmark stock index hovered just above 7,000 on Thursday afternoon, a thin gain after a morning slide that showed how quickly $100 oil can erase a semiconductor rally.

The KOSPI stood at 7,060.76 as of 2:39 p.m., up 9.12 points, or 0.13%. That print sat above Wednesday's close of 7,051.64, when the index finished 1.4% higher and recaptured 7,000 for the first time since July 23. Intraday on Thursday the tape was less tidy. After a brief push toward 7,073, selling linked to Brent crude above $101 a barrel pulled the index as low as the mid-6,900s before chips and institutions bought the dip.

The tug of war is the market in one sentence. Memory stocks are priced for years of artificial-intelligence demand. Energy and Treasury yields are priced for a shooting war near the Strait of Hormuz. On Wednesday those two stories produced a green close. On Thursday morning they produced a red open. By midafternoon they had almost canceled out.

SK hynix closed Wednesday at 1,856,000 won, up 3.51%. Samsung Electronics was unchanged at 269,500 won. Thursday morning both traded lower as oil jumped and U.S. yields stayed firm after Wall Street fell overnight. Samsung Electro-Mechanics, batteries and some shipbuilders swung with the same two headlines: AI infrastructure on one side, freight and fuel costs on the other.

Lee Kyoung-min, an analyst at Daishin Securities, described Wednesday's lift this way: "Despite an uncertain external environment, OpenAI's launch of its latest model, GPT-6 Astra, renewed optimism about AI growth prospects, supporting AI-related stocks." That model, and talk of heavier token use per query, is the domestic narrative for why high-bandwidth memory stays scarce. Kim Dong-won, head of research at KB Securities, told a KB Financial Group conference that memory demand could rise to roughly three times current levels as agentic AI spreads and by as much as tenfold at a "physical AI" stage. New fabs, he said, take three to four years to add supply, so shortages could last through 2028.

Those forecasts sit next to a more mechanical problem. Samsung Securities has estimated that exchange-traded funds tracking the KRX Semiconductor Index may need to sell on the order of 1.7 trillion won of Samsung Electronics and SK hynix to bring both weights back under a 20% cap, with rebalancing concentrated around Thursday's September futures and options expiration. Average daily KOSPI turnover has cooled from about 50 trillion won in June to about 20 trillion won this month. A large, scheduled sale into a thin tape is how an afternoon can reverse a morning.

Foreigners have not been the cavalry. They were net sellers Wednesday of more than 400 billion won while institutions bought about 942 billion won and retail sold more than 2 trillion won into the 7,000 handle — a level Korean brokers still call psychological resistance. The won last changed hands near 1,337 to 1,339 per dollar this week after a stronger close Wednesday.

Oil is the other weight. November Brent was quoted above $101 after renewed U.S.-Iran exchanges and strikes near energy infrastructure. West Texas Intermediate traded in the mid-$90s. South Korea imports almost all of its crude. Higher diesel and naphtha feed through to refiners, chemicals and household inflation just as the Bank of Korea has already lifted its base rate to 3.00% in August after a July increase to 2.75%. Two hikes in two months leave little room if energy inflation reaccelerates.

The broader corporate backdrop is stronger than the hourly chart. The Bank of Korea's second-quarter analysis of externally audited firms showed revenue growth of 26.7%, the fastest since 2015. Excluding Samsung and SK hynix, manufacturing revenue still rose 14%. That is why Goldman Sachs has kept a 12,000 KOSPI target in recent research even as the index chops around 7,000. Year-to-date the benchmark is still up on the order of 67%, a move that has turned the index into a concentrated bet on two memory names and global AI capital spending.

President Lee Jae-myung discussed freedom of navigation in the Strait of Hormuz with France's Emmanuel Macron in Paris this week as the Middle East fighting intensified. Markets heard the diplomacy as confirmation that the shipping lane is now a price factor, not a footnote.

Thursday's 0.13% gain is not a verdict. It is a pause at a round number after 33 sessions below it, a chip-led reclaim on Wednesday, and an oil-led scare on Thursday morning. If Astra-driven memory demand and long-term supply contracts with cloud buyers keep earnings visible through 2028, 7,000 is a floor that institutions will defend. If Brent stays over $100 and ETF rebalancing hits the close, the same handle is a ceiling retail already used to sell. The KOSPI at 7,060.76 is both stories trading at once.