On Thursday, the benchmark Kospi index surged over 4%, marking a recovery of approximately 23% from its low on July 30, as major players like Samsung Electronics and SK Hynix saw substantial gains of over 4% and 7%, respectively.
This rebound is largely attributed to renewed investor interest in technology hardware, spurred by strong earnings reports from global tech companies indicating ongoing investment in artificial intelligence. Fundstrat Global Advisors highlighted that the iShares MSCI South Korea ETF has surpassed a critical technical level, suggesting a positive outlook for Korean equities.
Mark Newton, head of technical strategy at Fundstrat, noted that memory stocks, which had previously underperformed, are now beginning to lead the tech sector's recovery, a trend that is particularly significant for South Korea due to the dominance of Samsung and SK Hynix in the market.
While Newton remains optimistic about the near-term prospects for South Korean stocks and memory shares, he warned that potential increases in U.S. Treasury yields and the dollar could dampen the rally later this month. For now, however, South Korea and its memory stocks are positioned as favorable options for investors seeking risk-on exposure