South Korea‘s Kospi surged over 5% to a high of 7,164 on Wednesday’s early trading, extending its rebound from an artificial intelligence stock selloff.Asian chipmakers led the gains for a second straight session.
Japan‘s Nikkei 225 added near 2% to 67,524.22, also in early trading. The rally builds on Tuesday’s rebound across Asian markets.
Samsung, SK Hynix Lead the Recovery
The gains extend July 21s rebound, when the Kospi jumped 3.6% and the Nikkei rose 3% after a number of days trending downwards. Chipmakers are looking to pull the Kospi back from a bear market slide that AI valuation fears caused earlier this month.
Samsung Electronics surged reversed its downward trend on Tuesday while SK Hynix, the memory chipmaker, gained also started gaining, recovering from its sharp sidecar plunge earlier this month.
The Kospi has managed to stop the fall in its price seen over the last few days. Image Source: Trading View
The Kospi is still down more than 20% over the past month, even after gaining over 50% year-to-date. Investors had locked in profits on AI bubble concerns.
Wall Street Also Jumps at Semiconductors
Wall Street added its own momentum on Tuesday. The Nasdaq 100 posted its best session in three weeks, and a key semiconductor gauge jumped 5.2%, according to Bloomberg.
Analysts remain split on whether the bounce will last.
“The recent correction appears more consistent with a healthy reset following a parabolic advance than a fundamental breakdown in the AI investment theme.”
Adam Turnquist, LPL Financial
Nearly 20% of S&P 500 companies by market value report earnings this week. Alphabet and Tesla release results Wednesday. Those results will test whether the chip rally can hold.
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