Seoul shares scale to new peak on extended chip rally

Seoul shares extend record rally, lifted by chipmakers

South Korean stocks closed at a new record high on Wednesday, extending a winning streak to a fourth consecutive session, as a powerful rally in heavyweight chipmakers Samsung Electronics and SK hynix propelled the benchmark index above the 8,200-point mark for the first time.

According to Yonhap News Agency, the Korea Composite Stock Price Index (KOSPI) climbed 181.19 points, or 2.25 percent, to close at 8,288.7 after touching an intraday high of 8,457.09. The index opened 2.42 percent higher and continued to climb in early trading, triggering a buy-side sidecar that temporarily halted KOSPI futures trading for five minutes.

The rally in Seoul came after Wall Street's S&P 500 and Nasdaq both clinched all-time closing highs overnight, helped by surging chip stocks, Yonhap reported. The U.S. chipmaker Micron jumped 19 percent, reaching a market value of US$1 trillion for the first time.

Record trading volumes underscore investor appetite

Separate data from the Korea Exchange (KRX), cited by Yonhap on Monday, showed that average daily transactions in the KOSPI surpassed 40 trillion won (US$26.4 billion) for the first time this month. The daily turnover averaged 48.05 trillion won during the first 22 days of May, exceeding the previous monthly high of 32.23 trillion won set in February.

The surge in trading activity accompanied the KOSPI's record-breaking run this month. The index first crossed the 7,000-point level on May 6 and briefly surpassed 8,000 points on May 15 before closing at 7,847.71 on Friday, a 19 percent gain from the end of April.

Yonhap attributed the increased turnover to heavy buying of market bellwethers, noting that the combined daily trading value for Samsung Electronics and SK hynix averaged 20.57 trillion won over the same period, accounting for roughly 43 percent of the KOSPI's total daily turnover.

Key claims

• The KOSPI rose 2.25 percent to a record close of 8,288.7 on Wednesday, after gaining for four consecutive sessions.
• The index opened sharply higher and triggered a buy-side sidecar, halting KOSPI futures for five minutes.
• U.S. stocks hit record closing highs, with chipmaker Micron soaring 19 percent to a $1 trillion market value.
• Average daily KOSPI turnover hit a record 48.05 trillion won in the first 22 days of May, the first time it surpassed 40 trillion won.
• Samsung Electronics and SK hynix accounted for about 43 percent of that daily turnover.

Perspectives

The rally reflects investors' heavy concentration in artificial intelligence-related industries, according to Yonhap, which cited an analyst's view that this trend has intensified since the AI investment boom began in 2023 — even amid broader concerns about an economic slowdown.

Kang Dae-seung, an analyst at SK Securities, was quoted as saying: "Despite concerns over an economic slowdown, investors are concentrating capital on AI-related industries where growth prospects remain strong." This perspective suggests that the market's upward momentum is driven as much by sector-specific enthusiasm as by overall economic fundamentals.

As of now, no dissenting views have been reported in the available sources, though it is worth noting that market rallies of this magnitude often prompt caution among some investors and analysts. The longevity of the AI-driven rally will likely depend on continued corporate earnings growth and global demand for semiconductor products.