Seoul, South Korea – South Korea’s stock market posted its strongest performance in nearly five weeks, driven by strong gains in chip and semiconductor stocks.
This came amid improved investor sentiment following data showing an unexpected decline in US inflation.
As a result, this reinforced expectations of continued momentum in the global technology sector.
Technology stocks lead the gains
The benchmark Kospi index rose, buoyed by strong performances from technology stocks,
particularly Samsung Electronics and SK Hynix.
These companies benefited from growing expectations of increased global demand for artificial intelligence chips.
Shares of Hanmi Semiconductor also surged by more than 29%, supported
by positive forecasts regarding the growth in demand for memory chips used in AI applications.
Activating the trading stabilization mechanism
The sharp rise in chip stocks triggered the “sidecar” mechanism on the Korean Stock Exchange.
This mechanism is a regulatory measure used to limit excessive volatility
and maintain market stability during periods of rapid trading.
This action reflects the significant activity in the market, driven by increased buying from both domestic and foreign investors.
Support from US inflation data
The Korean market’s gains coincided with positive performances on Wall Street,
particularly the Nasdaq and S&P 500 indices.
This followed the release of data showing a slowdown in US inflation,
which boosted global demand for technology stocks.
Analysts viewed the recent declines in chip company stocks as a buying opportunity.
Meanwhile, financial institutions, including Citi, reaffirmed their positive outlook on the Korean semiconductor sector,
predicting continued growth driven by increasing demand for artificial intelligence technologies.
