The KOSPI index surged over 2% on Wednesday, buoyed by the strong performance of U.S. semiconductor stocks. While it initially breached the 5800 mark, the index relinquished some gains as foreign buying momentum waned.

As of 9:18 a.m. (KST), the KOSPI stood at 5,783.66, up 134.87 points (2.39%) from the previous trading day. After reaching as high as 5,820 in early trading, it subsequently pared some of its gains.

Foreign and institutional investors were net buyers, purchasing 38.4 billion KRW (28.7 million USD) and 46.7 billion KRW (34.9 million USD) respectively. Individual investors, on the other hand, were net sellers, offloading 108.8 billion KRW (81.2 million USD) worth of shares.

The KOSPI 200 futures market also saw improved foreign buying, with foreign investors net purchasing 542 contracts by 9:20 a.m. (KST). Concurrently, individual investors net bought 276 contracts, while institutions net sold 727 contracts.

Among the top KOSPI stocks by market cap, SK Square jumped 4.78%, SK Hynix climbed 3.58%, Samsung Electro-Mechanics gained 2.9%, Samsung Electronics Preferred rose 2.45%, Samsung Electronics added 1.82%, KB Financial increased 1.06%, and Samsung Life Insurance edged up 0.96%.

In contrast, Samsung Biologics dipped 2.13%, and LG Energy Solution slipped 1.92%.

Market analysts attribute the domestic stock market's rebound to the recent rally in U.S. semiconductor stocks. On Tuesday, the Philadelphia Semiconductor Index surged 2.63% on Wall Street. Major chip makers also posted strong gains, with Micron up 2.58%, NVIDIA rising 2.27%, and AMD climbing 3.65%.

Notably, AMD and Super Micro Computer reported better-than-expected earnings after the market close, leading to after-hours gains of approximately 7% and 8% respectively. This development helped ease concerns about the profitability of artificial intelligence (AI) investments.

Han Ji-young, an analyst at Kiwoom Securities, commented that the strength of major U.S. AI stocks and recent market corrections have created attractive entry points for investors. It anticipates this will drive a rebound in the domestic market. The strong earnings reports from AMD and Super Micro are likely to boost sentiment for domestic AI-related stocks by alleviating worries about the AI investment cycle peak and profitability issues.

A key factor influencing the domestic market today will be the U.S. midterm election results. As vote counting coincides with Korean trading hours, it could impact U.S. index futures and foreign capital flows in both spot and futures markets.

Han added that while the conclusion of the midterms may be seen as resolving political uncertainty, the sustainability of any post-election rally will hinge on whether concerns about the AI industry subside and geopolitical risks are mitigated.

As of 9:04 a.m. (KST), U.S. Nasdaq 100 futures were up 0.24%, while S&P 500 futures gained 0.16%.

Simultaneously, the KOSDAQ index rose 6.67 points (0.95%) to 711.06.

Individual investors were net buyers, purchasing 72 billion KRW (53.8 million USD) worth of shares. Institutions and foreign investors were net sellers, offloading 20.9 billion KRW (about 15.6 million USD) and 34 billion KRW (about 25.4 million USD) respectively.

Among the top KOSDAQ stocks by market cap, Simmtech surged 8.64%, Jusung Engineering rose 3.48%, LEENO Industrial gained 3.36%, EcoPro added 2.85%, Wonik IPS climbed 2.49%, IoTechnics increased 2.37%, EcoPro BM advanced 2.17%, and Rainbow Robotics edged up 1.44%.

On the downside, HLB plummeted 17.94%, while Alteogen fell 4.22%.

The KOSPI index surged over 2% on Wednesday, buoyed by the strong performance of U.S. semi …

KOSPI Soars 2%: How U.S. Semiconductor Stocks Fuel South Korea's Market Surge