South Korea’s stock market staged a spectacular reversal on Friday as the KOSPI opened 1.15% higher before surging by approximately 13% within the first 15 minutes of trading. The benchmark gained 727.42 points to reach 6,320.98 by 9.15am, with semiconductor companies leading one of the market’s strongest rebounds on record.
Trading restriction activated
The speed of the advance prompted the Korea Exchange to activate a buy-side “sidecar” at 9.06am. The mechanism temporarily suspended programme trading for five minutes after KOSPI 200 futures rose by more than 5% for at least one minute.
The measure is designed to slow automated trading during periods of extreme volatility and allow investors time to assess rapidly changing market conditions.
The KOSPI had opened at approximately 5,658 points, compared with Thursday’s close of 5,593.56. It then accelerated dramatically as buyers returned to shares that had suffered heavy losses during the previous three sessions.
Chipmakers lead the recovery
Samsung Electronics surged more than 20% during early trading, while SK Hynix gained almost 23%. Hanmi Semiconductor rose more than 23%, and Samsung Electro-Mechanics approached the daily limit with an advance of nearly 30%.
The rebound spread beyond the largest chip manufacturers. Hyundai Motor gained almost 7%, internet company Naver rose approximately 5%, HD Hyundai Heavy Industries added more than 4% and defence group Hanwha Aerospace advanced close to 5%.
Despite the scale of Friday’s gains, the KOSPI remained substantially below the record level of 9,114.55 reached on 22 June. The market had suffered a severe correction as investors questioned whether the extraordinary investment being directed towards artificial intelligence would produce sustainable profits.
Microsoft restores confidence
The immediate catalyst for the recovery came from Wall Street, where Microsoft jumped more than 15% after reporting stronger-than-expected cloud growth and providing an encouraging outlook.
The results eased concerns that vast expenditure on data centres, chips and artificial intelligence infrastructure was failing to generate sufficient commercial returns.
The S&P 500 gained 1.66% overnight, the Nasdaq rose 2.78% and the Philadelphia Semiconductor Index surged more than 8%. Amazon also strengthened investor confidence by reporting accelerating growth in its cloud computing division.
South Korean chipmakers are crucial suppliers of the advanced memory required for AI servers. Any improvement in confidence surrounding American data-centre investment therefore has an immediate effect on valuations in Seoul.
Volatility remains extreme
The Korean won strengthened during the opening, trading near 1,428.65 against the US dollar by 9.15am. The currency later surrendered some of those gains as trading remained volatile.
South Korean authorities are also examining the risks created by leveraged exchange-traded products linked to individual technology shares. These instruments have amplified recent market movements and caused substantial losses for some retail investors.
Friday’s surge demonstrated how quickly sentiment can change in an increasingly AI-dependent market. It restored part of the value lost during the week, but it did not remove the underlying questions surrounding valuations, leverage and the sustainability of technology spending.
For investors in Seoul, the opening offered dramatic relief. Whether it represents the beginning of a lasting recovery or another violent movement inside an unstable market will depend heavily on future earnings from the world’s largest technology companies.
Newshub Editorial in Asia – 31 July 2026
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