KOSPI Jumps 2.6% to 5,375 as Foreigners Return and SK Hynix, Samsung Lead Chip Rally; Kosdaq Triggers Sidecar

SEOUL, South Korea — South Korean stocks rallied for a second straight day on Wednesday as foreign investors returned and semiconductor shares surged. Strong earnings from U.S. artificial intelligence cloud provider CoreWeave revived confidence in AI spending.

The benchmark KOSPI closed up 136.23 points, or 2.60%, at 5,375.36, reclaiming the 5,300 level. The tech-heavy Kosdaq jumped 37.49 points, or 5.62%, to 705.10. It closed above 700 for the first time in five trading days.

The rally came despite a weak start. The KOSPI opened down 0.56% at 5,209.71 and slipped to an intraday low of 5,207.44. The decline followed losses on Wall Street, where hotter-than-expected U.S. inflation data raised fears of further Federal Reserve rate increases, including a possible half-point hike in December. The market turned higher in the afternoon as buying spread across chip stocks.

The turnaround was driven by CoreWeave, which reported before the Seoul market opened that third-quarter revenue rose 168% and raised its full-year outlook. The AI cloud company had been at the center of worries about slowing AI investment and funding pressure.

Semiconductor shares led the gains: SK Hynix jumped 5.36%. Samsung Electronics rose 3.57%. DB HiTek surged 12.20%. Hanmi Semiconductor gained 6.11%. Chip equipment maker Jusung Engineering rose about 17%.

Foreign investors bought a net 655.4 billion won ($474 million) of KOSPI shares, their second straight day of net buying. Foreigners had been net sellers in early trading before switching to buying around midday. The buying is small compared with the nearly 30 trillion won ($22.2 billion) foreign investors pulled from the KOSPI between the start of October and Monday, according to AJP.

On the Kosdaq, the Korea Exchange triggered a buy-side "sidecar" at about 11:28 a.m. for the second consecutive day. The mechanism temporarily suspends program buy orders for five minutes when futures and the underlying index surge sharply. Institutional investors have bought a net 526.1 billion won of Kosdaq shares over two days, partly on expectations of government support for the junior market.

Wednesday's gain extends a rebound from a brutal selloff. The KOSPI rose 4.4% on Tuesday after plunging 11.71% last week, when foreign investors sold a net 10.44 trillion won ($7.2 billion) of shares amid fears about AI spending and rising U.S. interest rates.

Korean chip stocks rose even though Nvidia shares fell 5.5% overnight amid an investigation into CEO Jensen Huang. Analysts said investors were focused more on signs of continued AI demand than on the controversy.

Analysts cautioned that the outlook for U.S. interest rates remains a key risk. They said a sustained recovery will depend on continued inflows from large investors.