KOSPI Soars 3% Back Above 5,600 as Samsung and SK Hynix Rally on Anthropic IPO Boost Before Chip Earnings

South Korean stocks jumped more than 3% on Tuesday. Heavyweight chipmakers Samsung Electronics and SK Hynix led a broad rally as renewed optimism about artificial intelligence pulled foreign investors back into the market.

The benchmark KOSPI closed up 168.87 points, or 3.09%, at 5,638.34. That more than erased Monday's 1.4% decline and returned the index above the 5,600 level. The index rose as much as 4.9% during the session to an intraday high of 5,737.61 before giving back some of its gains.

The tech-heavy KOSDAQ rose 16.62 points, or 2.29%, to 743.83.

Sidecar triggered

The rally was strong enough to trigger a "sidecar" on the main board about 76 minutes after the open. The mechanism temporarily halts program buying orders to cool sharp market swings.

Gains were broad, but chipmakers did most of the work:

SK Hynix: rose 5.18%, or 66,000 won, to 1,341,000 won, leading the index. Samsung Electronics: gained 4.23%, or 9,000 won, to 222,000 won, reclaiming the 220,000-won level. SK Square: SK Hynix's largest shareholder rose about 7%. Samsung Electro-Mechanics: rose about 7%. Samsung Life Insurance and Samsung C&T each gained about 3%.

By sector, electrical and electronics stocks and medical precision instruments rose about 4%. Pharmaceutical stocks fell about 3%.

Foreign investors return

Foreign investors, whose heavy selling had driven Korea's recent sell-off, turned net buyers. They purchased a net 835.9 billion won ($631 million) of KOSPI shares, and institutions bought a net 418.5 billion won. Individual investors took profits, selling a net 1.4 trillion won.

On the KOSDAQ, institutions and foreigners were also net buyers, while retail investors sold. Battery and chip equipment stocks led the gains there, with Ecopro rising about 6% and Ecopro BM about 5%.

Anthropic filing sparks AI rebound

The rally followed gains on Wall Street, where the Nasdaq Composite rose 0.8% and the Philadelphia Semiconductor Index jumped nearly 3% on Monday.

U.S. markets were lifted by Anthropic, the developer of the Claude AI models, which publicly filed for an initial public offering on the Nasdaq. The filing showed first-half revenue of $16.3 billion, up from about $1.2 billion a year earlier, along with large commitments to buy computing capacity. Investors saw both as positive for memory chip demand.

Lee Kyung-min, an analyst at Daishin Securities, said improved sentiment toward AI investment lifted the chip-heavy index and that semiconductor fundamentals remained intact, according to Korean media.

Some analysts said investors should stay cautious.

"Concerns regarding AI investment resources and profitability have not been fully resolved," said Lee Jae-won of Yuanta Securities Korea. He pointed to Meta Platforms' plan to raise money through stock sales to fund AI spending and to credit risks at specialized cloud providers known as neoclouds.

Growth data helps

Economic data also supported sentiment. The Bank of Korea's advance estimate showed gross domestic product grew 1.0% in the third quarter from the previous three months and 3.4% from a year earlier.

Bouncing back from a rout

Tuesday's gain marked a sharp rebound for a market that has been under heavy pressure. The KOSPI has fallen more than 35% from its June peak, hit by waves of foreign selling, the end of major share buyback programs at Samsung and SK Hynix, and doubts about the profitability of AI investment.

On Oct. 13, the index plunged 5.46% in a single session, the day foreigners sold a net 4.51 trillion won of shares.

On Sunday, Goldman Sachs cut its 12-month KOSPI target to 9,000 from 12,000, though the lower target still implies substantial upside. The bank said the market "is pricing an overly negative fundamental outlook."

SK Hynix earnings in focus

Investors are now focused on SK Hynix, which releases preliminary third-quarter results at 9 a.m. on Wednesday. Traders are also waiting for any announcement on shareholder returns.

A media report over the weekend said SK Hynix was considering a special dividend of about 16 trillion won, funded by gains from selling its stake in Japanese flash memory maker Kioxia. In a regulatory filing, the company said it "is reviewing various shareholder return measures to enhance shareholder value, but nothing has been confirmed to date." It said further measures would be announced alongside its earnings.

Samsung Electronics reports quarterly results on Thursday.

Currency and outlook

The won ended slightly weaker at 1,323.7 per dollar.

Beyond the chip earnings, investors are watching the U.S. Federal Reserve's interest rate decision on Wednesday and quarterly results from major U.S. technology companies, including Alphabet, Microsoft and Amazon. Their spending on AI infrastructure is a key driver of demand for Korean memory chips.