Seoul shares start 13% higher on US tech gains driven by Microsoft's strong earnings

A screen at the dealing room of Hana Bank’s headquarters in Seoul shows the benchmark KOSPI and Kosdaq, Friday. Yonhap

Korean stocks opened sharply higher Friday, surging by 13 percent, driven by gains in semiconductor shares stemming from an overnight rally in U.S. tech giants backed by a strong earnings report from U.S. tech giant Microsoft.

After opening 1.15 percent higher, the benchmark Korea Composite Stock Price Index (KOSPI) widened gains, raking in 727.42 points, or 13 percent, to 6,320.98 as of 9:15 a.m.

The country's benchmark suffered a deep rout for the past three consecutive sessions. The KOSPI fell nearly 40 percent this month alone.

With the surge, the bourse operator activated a buy-side sidecar for the KOSPI at 9:06 a.m., suspending five-minute program trading for the KOSPI-listed shares.

A buy-side sidecar is triggered when the KOSPI 200 Futures index rises 5 percent or more for at least one minute.

Overnight, Wall Street closed higher as Microsoft jumped a record 15 percent after exceeding expectations for current-quarter sales and cloud growth in its second-quarter report, easing fears about massive spending on artificial intelligence (AI) infrastructure.

The S&P 500 climbed 1.66 percent and the Nasdaq gained 2.78 percent, while the Dow Jones Industrial Average rose 1.19 percent. The PHLX chip index, a gauge of U.S. semiconductor giants, surged 8.2 percent.

In Seoul, semiconductor shares led the upbeat opening.

Market bellwether Samsung Electronics surged 20.77 percent and its chipmaking rival SK hynix skyrocketed 22.69 percent.

Hanmi Semiconductor, a leading chip equipment manufacture, shot up 23.21 percent and Samsung Electro-Mechanics, an electronic component affiliate of Samsung Electronics, flew up 29.81 percent.

The Korean won was trading at 1,428.65 won against the U.S. dollar as of 9:15 a.m., down 3.95 won from the close of stock trading the day before.