South Korea’s benchmark Kospi index closed nearly 18% higher on Friday, July 31, recovering part of the losses from a three-day market rout. The rebound was led by memory chipmakers SK Hynix and Samsung Electronics, whose shares had fallen sharply earlier in the week.
SK Hynix reached South Korea’s daily price limit after climbing 30%, while Samsung gained about 27%. Their advances helped produce the Kospi’s largest single-day percentage increase on record.
US Technology Earnings Lift AI Stocks
The rebound followed earnings reports from Amazon and Microsoft that eased some concerns about the financial returns from artificial intelligence spending. Investors had recently sold AI-related shares because of worries over the hundreds of billions of dollars being directed towards chips, data centres and other infrastructure.
Amazon shares rose more than 9% in after-hours trading after its cloud division reported stronger growth. Amazon Web Services revenue increased 37% from a year earlier to $42.2 billion, while the company raised its planned 2026 capital expenditure to $220 billion.
Microsoft also gained after reporting results that showed stronger demand for its cloud and AI services. The company’s shares recorded a sharp post-earnings increase, giving investors more confidence that large infrastructure investments could generate revenue growth.
Technology and chip stocks also rose in Japan and Taiwan as the improved sentiment spread across Asian markets.
Rebound Follows Three-Day Market Rout
The Kospi’s surge recovered only part of the value erased earlier in the week. On Tuesday, the index fell nearly 11%, followed by another 6% decline on Wednesday as investors reduced exposure to AI-related stocks.
SK Hynix and Samsung were among the largest contributors to those losses. Investors had become concerned about the durability of AI demand, growing competition from Chinese chipmakers and the risks created by heavily leveraged investments.
South Korea’s stock market has attracted large numbers of retail investors during its rise this year. Leveraged exchange-traded funds tied to individual companies amplified losses by forcing additional selling when share prices fell.
Regulators responded by suspending new listings of some leveraged products, restricting their promotion and raising deposit requirements for investors. Market-wide circuit breakers have also halted Kospi trading several times this year when losses passed specified thresholds.
Despite the recent declines, the Kospi remained more than 50% above its level at the end of 2025 following Friday’s rebound. The index had more than doubled earlier in the year before retreating from its record high in June.
Featured image credits: Adobe Stock
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