KOSPI Rebounds Modestly as SK Hynix's Oversubscribed Nasdaq Listing Lifts Battered Chip Stocks Thursday

SEOUL, South Korea — South Korea's benchmark KOSPI index closed higher Thursday, rising 45.12 points, or 0.62 percent, to 7,291.91, recovering modestly from a steep two-day rout as strong investor demand for SK Hynix's planned Nasdaq listing helped restore some confidence in the country's battered semiconductor sector.

The rebound followed a punishing selloff earlier in the week that had briefly pushed the KOSPI into bear market territory. The index plunged 4.91 percent Tuesday and a further 5.35 percent Wednesday, closing at 7,246.79, its lowest level since May 20 and more than 20 percent below the index's June 22 record of 9,114.55, the threshold traders use to confirm a bear market. Thursday's opening bell offered immediate relief, with the KOSPI jumping as much as 3.3 to 3.7 percent in early trading before settling into a more modest close as the session progressed.

The rebound was driven largely by renewed strength in the two chipmakers that dominate the index. SK Hynix climbed 5.83 percent Thursday, while Samsung Electronics edged up a more modest 0.36 percent, both recovering a portion of the sharp declines suffered a day earlier. Semiconductor shares found support after reports confirmed that SK Hynix's planned U.S. American Depositary Receipt offering had been oversubscribed by more than seven times, reflecting strong investor demand for the memory chipmaker despite the broader volatility gripping the sector. Other notable gainers Thursday included SK Square, up 4.80 percent, SK Inc., up 2.36 percent, LS Electric, up 2.13 percent, and Hyosung Heavy Industries, up 3.87 percent.

Sentiment was further supported by an upgraded economic outlook for South Korea. The Asian Development Bank raised its 2026 growth forecast for the country to 2.6 percent from a previous estimate of 1.9 percent, citing robust global AI demand and strong semiconductor exports as key drivers behind the improved projection. Even so, renewed tensions between the United States and Iran kept investors cautious throughout the session, with higher oil prices continuing to fuel inflation concerns and weigh on broader global risk appetite.

Some analysts pointed to signs that the market's recent violent swings may have pushed valuations into genuinely oversold territory. According to Kiwoom Securities, the KOSPI's 12-month forward price-to-earnings ratio stood at 6.25 as of Wednesday, a level even lower than the market's trough during the 2008 global financial crisis, when the ratio bottomed at 6.27. Kiwoom Securities research analyst Ji-Young Han said the index had technically entered oversold territory, adding that the area around 7,280 points represented a zone where the market could plausibly find a bottom. Hana Securities offered a similar assessment, noting that during past major downturns, including concerns over U.S. interest rate policy and the outbreak of the broader Iran conflict, the KOSPI's average maximum drawdown from peak levels had been roughly 20 percent, a figure that would translate to approximately 7,290 points under current conditions. Hana Securities analyst Jaeman Lee noted that as of Wednesday, 88 percent of KOSPI-listed stocks had fallen more than 30 percent from their yearly highs, suggesting that large-cap names had already absorbed significant declines and that the possibility of a price bottom forming was worth considering.

Despite those constructive technical signals, some risks continue to cloud the outlook for South Korea's chip-heavy market. U.S. investment bank Goldman Sachs has cautioned that companies within the artificial intelligence sector, which have driven much of the recent earnings-fueled rally, may find it difficult to sustain the pace of surprises that propelled valuations higher earlier this year, a concern that has weighed on sentiment toward memory chipmakers globally in recent weeks.

This week's volatility caps an extraordinary run for South Korean equities in 2026. The KOSPI has been among the best-performing major stock indices globally this year, having surged as much as 92 percent at various points, driven by an unprecedented boom in memory chip demand tied to global AI infrastructure spending. That dramatic rally, however, has left the market particularly vulnerable to sharp reversals, a dynamic that played out dramatically over the past week as investors questioned whether current chip valuations had run too far ahead of underlying fundamentals, despite Samsung Electronics reporting record preliminary second-quarter operating profit of 89.4 trillion won, or roughly $58.6 billion, a figure that nonetheless failed to prevent a sharp "sell the news" reaction across the sector.

Concerns over leveraged single-stock exchange-traded funds tied to Samsung and SK Hynix have also contributed to the market's recent instability, with South Korean authorities saying they would closely monitor risks to broader financial stability given how sharply those instruments can amplify price swings during periods of heightened volatility. Tuesday's plunge triggered South Korea's sixth circuit breaker of the year, a 20-minute trading halt automatically activated when the index falls at least 8 percent from the previous session's close.

SK Hynix's planned Nasdaq listing has emerged as a central storyline shaping investor sentiment this week, with the company's American Depositary Receipt offering reportedly capable of raising as much as 45.45 trillion won, or roughly $29.4 billion, positioning it as one of the largest such listings from a South Korean company. Analysts have said the strong subscription demand for the offering helped counteract some of the broader anxiety weighing on the chip sector earlier in the week, though some market watchers, including UBS, have flagged the potential for a pricing gap to emerge between SK Hynix's existing Seoul-listed shares and its new U.S. listing, adding a fresh layer of scrutiny to the closely watched deal.

With South Korea's chip sector continuing to navigate a delicate balance between historic profitability and mounting questions about the sustainability of the broader AI investment cycle, investors are likely to remain focused on how SK Hynix's Nasdaq debut ultimately performs once trading begins, along with any further signals from Samsung's forthcoming detailed quarterly results, as they assess whether Thursday's modest rebound marks the beginning of a more durable recovery or merely a pause within an increasingly volatile stretch for one of the world's best-performing stock markets this year.