Chip rally lifts KOSPI 3.56% in 4th straight gain

KOSPI index is displayed in the dealing room of Hana Bank in Seoul, Thursday. The benchmark KOSPI closed at 6,813.34, up 3.56 percent from the previous session. Yonhap

KOSPI surged 3.56 percent Thursday, extending its winning streak to four sessions as sharp gains in semiconductor heavyweights kept the index in positive territory.

The benchmark KOSPI closed at 6,813.34, up 3.56 percent from the previous session. The index opened 2.96 percent higher and extended its gains throughout the session.

Foreign and institutional investors bought a net 2.1 trillion won ($1.47 billion) and 680.9 billion won worth of shares, respectively. Retail investors, however, sold a net 2.73 trillion won worth of shares amid profit-taking.

An overnight rally in U.S. semiconductor stocks spilled over into the Korean chip sector, boosting investor sentiment. SK hynix rose 5.92 percent to close at 1,593,000 won, while Samsung Electronics gained 4.89 percent to finish at 268,000 won.

Samsung Electro-Mechanics also rallied after Morgan Stanley replaced Samsung Electronics with the company as its top pick and raised its target price to 2.62 million won from 2.56 million won. Shares jumped 12.58 percent to close at 1,503,000 won.

Foreign investors' net selling pressure has eased considerably. Net selling narrowed sharply from 48.3 trillion won in June to 9.9 trillion won in July, and has remained relatively limited at 4.5 trillion won in August through Wednesday.

Sentiment was supported by continued signs of robust demand for artificial intelligence (AI) infrastructure. Following strong results from CoreWeave and Super Micro, Nebius reported a 514 percent year-on-year surge in second-quarter AI cloud revenue to $575 million, while the average size of its large contracts exceeded $1 billion.

Adding to the positive mood, the U.S. consumer price index for July, released overnight, came in line with expectations, easing concerns over a possible Federal Reserve rate hike in September.

"Samsung Electronics and SK hynix are trading at around three times their 2027 estimated earnings, an exceptionally low valuation level," said Kim Dong-won, head of research at KB Securities. "Expectations for stronger earnings next year have yet to be fully priced into their shares, leaving substantial room for a valuation re-rating."

The Kosdaq also extended its winning streak, rising 0.29 percent to close at 861.37.

The won-dollar exchange rate closed at 1,419.4 won per dollar, up 3.7 won from the previous session.