South Korea's Stock Market Experiences Record Reversal Amid AI Sector Volatility
South Korea’s stock market experienced its sharpest reversal on record, with the benchmark Kospi index surging by over 14% following a sharp sell-off earlier in February. The rebound was driven largely by foreign investors and fueled by strong overnight gains in U.S. tech stocks like Microsoft, Amazon, and Meta after positive earnings reports. These results reinforced confidence that spending on AI infrastructure remains robust. The rally also received support from SK Group Chairman Chey Tae-won’s purchase of shares in SK Hynix, the world's second-largest memory chipmaker. Analysts noted that leveraged ETF rebalancing and short-covering amplified gains. However, experts caution against expecting sustained momentum, with some warning that asset prices are increasingly disconnected due to high leverage. Despite the sharp rebound, concerns remain about market stability amid signs of forced liquidations in semiconductor stocks and stretched AI valuations.
Topics: AI sector foreign investment Kospi tech stocks