Kospi Enters Bull Market as AI Trade Lifts Samsung, SK Hynix
South Korea's Kospi has entered a technical bull market as a resurgence in artificial intelligence spending drives a sharp recovery in the country's dominant memory chipmakers.
South Korea’s benchmark Kospi surged more than 4% in early trading on Thursday, pushing the index into a technical bull market. Data from LSEG shows the index has rallied roughly 23% since hitting a low on July 30. The swift recovery is directly tied to a global revival in artificial intelligence investments, effectively erasing the panic from last month's historic technology sell-off.
Index heavyweights Samsung Electronics and SK Hynix powered the advance, climbing over 4% and 7%, respectively. The concentrated gains reflect returning institutional confidence in technology hardware. This appetite is heavily supported by recent earnings reports from major global tech firms, which confirmed that sustained, heavy capital expenditure on AI infrastructure will continue.
The market structure is also shifting favorably. The iShares MSCI South Korea ETF has broken above a crucial technical threshold on the back of these chipmakers, according to Fundstrat Global Advisors. Mark Newton, the firm's head of technical strategy, noted that this breakout confirms a reversal pattern that "looks attractive technically for further near-term gains."
Memory stocks are now outperforming the wider technology sector for the first time since June. Newton described this shift in relative strength as "a good sign in the short run for Memory within Technology," pointing out that memory is among the final major tech sub-sectors to turn higher. Because Samsung and SK Hynix hold such outsized sway over South Korean equities, their recovery dictates the direction of the broader national market.
Fundstrat indicated that the combination of the Korean rebound and the memory recovery is broadening a rotation back into technology, a dynamic currently playing out even as some large-cap U.S. tech names struggle. However, Newton cautioned that this rally could lose steam later in the month if U.S. Treasury yields and the dollar resume climbing. For the immediate future, he argued that South Korea and memory stocks "look to be the right vehicles for near-term risk-on exposure."
