Kospi rebounds over 3% on eased AI spending woes

Stocks rebounded Wednesday, recovering from the previous session's steep losses as semiconductor shares rallied on easing concerns over AI spending. The Korean won strengthened against the dollar.

The Kospi gained 182.92 points, or 3.29 percent, to close at 5,735.66 after rising as high as 5,816.43.

The sharp rally prompted the Korea Exchange to activate a buy-side sidecar shortly before 11 a.m., temporarily suspending program buying for five minutes after Kospi 200 futures rose more than 5 percent. It marked the first such activation in two months.

The rebound came after the main index plunged nearly 4 percent the previous session amid renewed concerns over massive AI infrastructure spending.

Investor sentiment improved after better-than-expected earnings from U.S. AI server maker Super Micro Computer helped ease worries over AI-related investments, lifting shares of chip giants Samsung Electronics and SK hynix.

Overnight, U.S. stocks closed mixed, with the Dow Jones Industrial Average rising 1.02 percent, while the tech-heavy Nasdaq composite slipped 0.02 percent.

Trade volume was light at 214.35 million shares worth 17.16 trillion won ($12.96 billion), with decliners outnumbering advancers 487 to 372.

Foreigners bought a net 659.96 billion won, while individuals and institutions sold a net 1.13 trillion won and 72.22 billion won, respectively.

"The local market rebounded on bargain hunting after the previous session's sharp sell-off, buoyed by easing concerns over oil prices and interest rates and upbeat earnings from Super Micro," said Han Ji-young, an analyst at Kiwoom Securities.

Market heavyweights rose across the board, led by semiconductor shares.

Samsung Electronics rose 5.67 percent to 223,500 won, while chipmaker SK hynix advanced 5.81 percent to 1.29 million won. SK, the holding company of SK Group, jumped 12.62 percent to 482,000 won, recovering from a nearly 8 percent plunge in the previous session.

LS Electric, a power equipment maker, surged 7.02 percent to 166,100 won after reporting better-than-expected third quarter earnings, driven by robust demand from AI data centers.

LIG D&A plunged 9.03 percent to 498,500 won after Korea's arms procurement agency barred the defense company from bidding on defense contracts for two years over bribery allegations.

The local currency strengthened by 2.9 won from the previous session to trade at 1,325.2 against the dollar as of 3:30 p.m. 

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys lost 1.8 basis points to 3.822, and the return on the benchmark five-year government bonds went down 2.5 points to 3,965.

Yonhap