South Korean markets showed signs of recovery on Friday, with the benchmark KOSPI rising 131.07 points or 2.36% to 5,685.29, rebounding from a six-month closing low as dip buying emerged. However, the index remains on track for its biggest weekly loss in 18 years, falling 14.3% so far this week and heading for a third consecutive weekly decline. The index has extended losses to a seventh straight session, marking the longest run of daily losses since September 2024, with past cases of seven consecutive sessions of losses suggesting much higher expected value for technical reversal than risk of additional decline, according to Han Ji-young, an analyst at Kiwoom Securities. Foreign investors were net sellers of shares worth ₹307.8 billion during the session, adding to the selling pressure that has characterized recent trading, as reported by The Economic Times.
Chipmaker Samsung Electronics rose 1.90% while peer SK Hynix gained 1.82% during Friday's recovery session, showing resilience after the severe selloff that has characterized recent trading. Among other index heavyweights, battery maker LG Energy Solution climbed 0.62%, while Hyundai Motor and sister automaker Kia Corp were up 6.77% and 5.52%, respectively. Steelmaker POSCO Holdings added 2.74%, while drugmaker Samsung BioLogics rose 4.33%. Of the total 914 traded issues, 768 shares advanced while 124 declined, indicating broad-based buying interest despite the ongoing concerns about AI investment sustainability. The latest rebound was supported by dip buying following the sharp losses, although foreign investors continued to sell South Korean equities, highlighting continued caution despite the market's recovery.
The South Korean won was quoted at 1,346.1 per dollar on the onshore settlement platform, 0.30% lower than its previous close at 1,342.0, reflecting continued pressure on the currency amid the market turmoil. In money and debt markets, December futures on three-year treasury bonds gained 0.01 point to 102.96, while the most liquid three-year Korean treasury bond yield rose by 0.8 basis point to 3.877%. The benchmark 10-year yield rose by 0.3 basis point to 4.205%, showing mixed signals in the bond market as investors navigate the volatile conditions. The finance ministry said it would step up financial market monitoring and closely watch for any impact of recent stock market volatility on bond, foreign exchange and short-term money markets, as reported by The Economic Times.
CXMT Corp. has made progress on a new memory architecture that Samsung and SK Hynix are also working on, according to a report from South China Morning Post on Monday, resurfacing fears of rapid development by Chinese chipmakers that have rattled global rivals this year. As reported by Bloomberg, CXMT plans to roll out a new server-memory product by the end of 2026 that enables higher storage density, intensifying competition concerns. The CXMT announcement was the reason behind the selloff in US chip stocks as well, with Micron, Nvidia, AMD, Intel, SanDisk and others slumping up to 6% overnight. In the currency market, the South Korean won weakened 0.22% to 1,338.8 per dollar on the onshore settlement platform, while South Korean government bond yields moved lower amid the market turmoil.
Nvidia demonstrated greater resilience during the AI chip selloff, falling only 1.3% to $226.32 compared to the severe declines in memory stocks. Since August 3, Nvidia's shares have traded in a range of about 16%, from a low of $206.64 to a high of $239.24, while Micron's range was about 32%, from $829.50 to $1,097.39. Nvidia had a daily move of more than 3% on 6 of the 49 trading days to October 12, compared to 17 days for Micron. The worst peak-to-trough fall in the past ten weeks was 8.4% for Nvidia against 10.1% for Micron, 14.9% for SK Hynix and 12.3% for Samsung. After Tuesday's decline, SK Hynix is about 23% below its September 21 high and Samsung about 19% below its September 23 high, while Nvidia remains about 5% below its October 6 peak despite the broader market turmoil.
Broadcom CEO Hock Tan has identified capital as the biggest constraint facing the technology industry as artificial intelligence development accelerates, marking a significant shift from his previous concerns about memory chip supply. Speaking at a panel in Singapore on Monday, Tan explained that 'There is more demand for compute infrastructure than we can supply,'' with the imbalance potentially persisting through 2029 and potentially into 2030. This represents a fundamental change from his earlier focus on memory chip supply constraints, as recurring supply bottlenecks over the past two years are now easing as production capacity expands. Tan has now warned that insufficient capital could become the next constraint on the industry's growth, highlighting the shift from hardware supply to funding availability as the primary limiting factor. The remarks have also sent the Nasdaq futures lower by over 250 points, demonstrating the global impact of his comments. Global AI stocks plunged after Tan warned that investors are treating artificial intelligence like gambling, raising concerns about excessive valuations and unsustainable spending.
