Seoul shares post record 18 percent jump to reclaim 6,500 point level on chip rally

Stocks skyrocketed by a record 18 percent to reclaim the 6,500-point level Friday, driven by robust semiconductor gains as better-than-expected Microsoft earnings eased concerns over AI spending. The local currency rose sharply against the U.S. dollar.

The Kospi added 1,001.89 points, or 17.91 percent to close at 6,595.45, sharply rebounding from a three-session deep rout caused by a drop in chipmakers and other AI-related stocks.

It marked the largest single-day gain in both points and percentage terms in the index's history.

The previous record for the largest percentage gain was 11.95 percent, set on Oct. 30, 2008, during the global financial crisis. The previous record for the largest point gain was 612.52 points, or 8.18 percent, set on July 9.

The sharp rally triggered buy-side sidecars on the Kospi and the tech-heavy Kosdaq index, with both activated at 9:06 a.m.

The Kospi had shed more than 17 percent over the previous three sessions, largely due to anxiety over heavy spending on AI infrastructure.

Investor sentiment, however, improved after Microsoft reported better-than-expected second-quarter earnings overnight, beating forecasts for sales and cloud-computing growth.

Trade volume was heavy at 430.2 million shares worth 48.9 trillion won ($34.2 billion), with gainers outnumbering decliners 772 to 127.

Foreigners and institutions led the upbeat market, purchasing a net 7.22 trillion and 1.15 trillion won, respectively, while individuals dumped a net 8.26 trillion won.

"Semiconductor shares were the main driver of the Kospi's surge," Kim Seok-hwan, an analyst from Mirae Asset Securities, said. "Earnings of large data center operators, such as Microsoft and Amazon, eased concerns over AI investment and pushed up stocks here."

As part of the government's measures to curb market volatility, meanwhile, the minimum cash deposit required to invest in single-stock leveraged exchange-traded funds (ETF) increased to 30 million won from the previous 10 million, starting Friday.

Samsung Electronics shot up 26.81 percent to 262,500 won, and SK hynix surged by a daily limit of 29.95 percent to 1.72 million won.

Hanmi Semiconductor, a chip equipment manufacturer, soared 27.98 percent to 214,500 won, and SK Square, the parent of SK hynix, escalated by a daily limit of 29.91 percent to 1.04 million won.

Carmakers and shipbuilders were strong as Hyundai Motor jumped 10.54 percent to 388,000 won, and HD Hyundai Heavy Industries mounted 7.37 percent to 481,000 won.

Defense stocks were also in positive territory on renewed military tensions and strong earnings, with Hanwha Aerospace rising 6.01 percent to 917,000 won and LIG D&A vaulting 9.05 percent to 699,000 won.

The local currency rose 13.4 won from the previous session to trade at 1,424 against the greenback at 3:30 p.m. 

BY LEE TAE-HEE, YONHAP [[email protected]]