Korean stocks stage broad rebound after U.S. tech rally

South Korean stocks rallied sharply Tuesday, recovering from three consecutive sessions of steep losses, as semiconductor heavyweights led a broad rebound following a sell-off triggered by concerns over potential U.S. restrictions on data center construction.

The benchmark Kospi jumped 5.17 percent to 5,278.40 as of 9:26 a.m., after opening 4.55 percent higher at 5,247.22. It briefly climbed as much as 5.62 percent to 5,300.92, crossing the 5,300 mark.

The sharp gains triggered buy-sidecar measures on both the main Kospi and secondary Kosdaq markets, temporarily suspending program buy orders.

Foreign investors, who had been net sellers on the main bourse for seven consecutive sessions through Monday, turned net buyers, purchasing a net 85.7 billion won ($63.7 million) worth of shares. Institutions also bought a net 230 billion won, while retail investors continued selling, offloading a net 372.6 billion won.

Overnight, all three major U.S. stock indexes advanced as bargain hunting lifted technology shares. The Dow Jones Industrial Average rose 2.15 percent, while the S&P 500 and Nasdaq Composite gained 2.35 percent and 2.74 percent, respectively.

Among individual stocks, Advanced Micro Devices Inc. (AMD) surged 13.26 percent, Broadcom Inc. jumped 8.78 percent and Marvell Technology Inc. climbed 9.49 percent.

Micron Technology Inc. and SK hynix’s American depositary receipts (ADRs) also advanced 6.25 percent and 5.53 percent, respectively.

The Philadelphia Semiconductor Index soared 6.86 percent after plunging more than 12 percent on Thursday alone.

CoreWeave Inc., widely regarded as a bellwether for artificial intelligence (AI) infrastructure investment, rose 5.56 percent ahead of its third-quarter earnings announcement scheduled for Tuesday, local time.

Nvidia Corp., however, fell 4.27 percent after Chief Executive Officer (CEO) Jensen Huang admitted to an extramarital affair with a businesswoman suspected of being a spy linked to Chinese intelligence agencies.

“The strength in most semiconductor and AI stocks, excluding Nvidia, suggests that the market is distinguishing between the AI investment cycle and the controversy surrounding CEO Jensen Huang,” said Han Ji-young, an analyst at Kiwoom Securities Co.

A sharp decline in international oil prices also helped ease risk aversion.

West Texas Intermediate (WTI) crude futures fell 4.38 percent, while Brent crude futures dropped 5.85 percent, amid growing expectations of easing military tensions in the Middle East.

In Seoul, Samsung Electronics surged 5.58 percent to 200,500 won, reclaiming the psychologically significant-200,000-won level it had lost on Friday. The stock briefly climbed as much as 6.11 percent to 201,500 won.

SK hynix jumped 8.19 percent to 1.229 million won after opening 6.87 percent higher. It briefly soared 9.33 percent to 1.242 million won, recovering the 1.2 million-won level it had also lost on Friday.

Other major Kospi-listed stocks also advanced, including SK square Co., up 8.17 percent, LG Energy Solution Ltd., up 2.83 percent and Samsung Electro-Mechanics Co., up 6.17 percent.

Samsung Biologics Co., and Celltrion Inc. were among the few decliners, falling 1.72 percent 0.24 percent, respectively.

By sector, medical and precision equipment stocks rose 7.68 percent, machinery and equipment gained 7.4 percent, and electrical and electronics climbed 6.76 percent.

Food, beverages and tobacco fell 0.92 percent and real estate 0.16 percent, becoming the only sectors trading lower despite the broader market rally.

The Kosdaq also climbed 4.18 percent to 665.66, after opening 3.56 percent higher at 661.73. It briefly rose as much as 5.16 percent to 671.91.

Institutions and retail investors were net buyers on the secondary market, purchasing 52.5 billion won and 9.6 billion won worth of shares, respectively. Foreign investors sold a net 53.9 billion won.

Most Kosdaq heavyweights also rallied.

Alteogen Inc., the market’s largest company by market capitalization, rebounded 7.01 percent after plunging more than 16 percent on Monday. EcoPro Co. rose 6.02 percent, EcoPro BM Co. 4.35 percent, Jusung Engineering Co. 8.33 percent and Rainbow Robotics Co. 5.45 percent.

Korean airline stocks, meanwhile, rallied Tuesday as oil prices tumbled on expectations of easing tensions between the United States and Iran.

Korean Air Lines Co. was trading at 31,900 won as of 9:42 a.m., up 9.62 percent from the previous session.

The stock briefly surged 12.71 percent to 32,800 won in early trading, hitting a fresh 52-week intraday high.

Korean Air’s preferred shares soared 29.98 percent to 38,150 won, reaching the daily upper price limit.

Asiana Airlines Inc. gained 8.86 percent, Jeju Air Co. climbed 5.71 percent, and Hanjin KAL Corp. advanced 10.6 percent, with all three stocks hitting fresh 52-week intraday highs.

In a telephone interview with CNN on Sunday, local time, U.S. President Donald Trump said there was “very little chance” that military strikes against Iran would need to resume, provided the two sides reached an agreement.

Trump also wrote on his social media platform Truth Social after meeting Qatari Prime Minister Mohammed bin Abdulrahman Al Thani at the White House the previous day, local time, that “we are seeing positive momentum toward an end to this conflict.”

December-delivery WTI crude futures fell 4.38 percent to settle at $86.85 per barrel overnight, while January-delivery Brent crude futures dropped 5.85 percent to $92.57 per barrel.

“Next year, airlines are expected to benefit simultaneously from cost reductions driven by oil prices passing their peak and a stronger won, as well as a recovery in outbound travel demand,” said Ahn Do-hyun, an analyst at Hana Securities Co.

Construction and other stocks associated with postwar reconstruction also rose in early trading Tuesday amid growing expectations of easing military tensions in the Middle East.

Junjin Construction & Robot Co. was trading at 41,650 won as of 9:27 a.m., up 6.52 percent from the previous session.

Daewoo Engineering & Construction Co. (Daewoo E&C) went up 8.24 percent, Hyundai Engineering & Construction Co. up 7.98 percent and DL E&C Co. up 11.07 percent.