SEOUL, July 27 (AJP) — South Korean stocks rebounded Monday after investors looked past the blockbuster debut of Chinese memory chipmaker CXMT and instead focused on fresh artificial intelligence (AI) partnerships, allowing chip shares to recover from early declines.
The benchmark KOSPI closed at 6,755.75, up 0.97 percent after reversing an early decline triggered by more than 2 trillion won in foreign selling. The junior KOSDAQ outperformed, rising 2.22 percent to 764.86.
The session opened on a cautious note as investors reacted to CXMT's record-breaking Shanghai debut, which briefly made the Chinese DRAM maker the largest company on the mainland by market capitalization. The listing reignited concerns that China's rapid expansion in memory chips could intensify competition for Samsung Electronics and SK hynix.
CXMT raised nearly 58 billion yuan through its initial public offering (IPO), with the proceeds expected to increase further if an overallotment option is fully exercised. The fresh capital is expected to accelerate investment in high-bandwidth memory (HBM) and other AI-related memory technologies, raising fears that the company could narrow the technology gap with global industry leaders over time.
The uncertainty initially weighed on semiconductor shares, with the KOSPI briefly falling about 0.7 percent as foreign investors stepped up selling.
Sentiment, however, improved through the afternoon as attention shifted from competitive risks to the longer-term outlook for AI infrastructure spending, with weekend announcements from the AI Summit in Silicon Valley further supporting risk appetite.
Samsung Electronics signed a memorandum of understanding (MOU) with Broadcom covering potential cooperation worth up to $200 billion over five years, while SK hynix secured letters of intent for long-term memory supply agreements totaling $750 billion with customers including Nvidia and Microsoft.
The renewed optimism helped chipmakers reverse course by the close. Samsung Electronics climbed 1.8 percent to 254,000 won and SK hynix gained 3.24 percent to 1,816,000 won.
Among other large-cap stocks, Samsung Biologics rose 1.78 percent to 1,545,000 won, LG Energy Solution gained 1.06 percent to 333,000 won and KB Financial Group added 0.64 percent to 172,600 won. SK Square fell 1.17 percent despite the broader rebound in chip-related shares.
Internet platform operator Naver jumped 8.43 percent to 225,000 won after announcing a roughly $1 billion private placement to Nvidia alongside a plan to cancel about 1 trillion won worth of treasury shares.
LG Electronics climbed 1.83 percent to 172,300 won after saying its liquid-cooling solution for AI data centers had obtained Nvidia certification, while LG CNS also advanced more than 3 percent.
Defense stocks underperformed after disappointing earnings from Hyundai Rotem heightened concerns over future order momentum. Hanwha Aerospace tumbled 8.17 percent to 899,000 won.
The KOSDAQ outperformed as investors also welcomed President Lee Jae Myung's meetings with leading Silicon Valley venture capital firms, raising expectations for greater overseas funding for Korean startups.
Robotics developer Rainbow Robotics jumped 6.57 percent to 446,000 won, while semiconductor equipment maker Jusung Engineering climbed 6.31 percent to 149,900 won and chip equipment supplier Wonik IPS gained 5.47 percent to 106,000 won. Biopharmaceutical developer Alteogen rose 3.83 percent to 312,000 won, battery materials makers EcoPro and EcoPro BM advanced 3.20 percent and 2.03 percent to 80,600 won and 110,500 won, respectively, while drug developers HLB and ABL Bio edged up 0.48 percent and 0.28 percent.
The Korean won weakened against the U.S. dollar, with the greenback trading at 1,469.80 won as of the market close, up from Friday's close of 1,466.60 won, as foreign investors remained net sellers despite the recovery in equities.
Analysts also continued to monitor the impact of tighter regulations on single-stock leveraged exchange-traded funds (ETFs), which will take effect on Friday. Meritz Securities said higher minimum deposit requirements and the exclusion of substitute securities from deposit calculations are likely to reduce speculative turnover, although trading in Samsung Electronics- and SK hynix-linked leveraged ETFs remains elevated. The brokerage said persistent concentration in the two chipmakers could leave the broader market more vulnerable to liquidity swings.
Seoul's recovery was broadly mirrored across the region. Japan's Nikkei 225 added 0.66 percent to 65,038.00, while China's Shanghai Composite rose 1.15 percent to 3,858.25 as investors cheered CXMT's landmark debut. Hong Kong's Hang Seng Index also gained 1.11 percent to 25,241.00.
Investors are now turning their attention to a packed week of corporate earnings and policy decisions. SK hynix is scheduled to report earnings on Wednesday, followed by Samsung Electronics the next day, with investors watching whether management can ease concerns that the memory upcycle is nearing its peak. Earnings from Microsoft, Meta and Amazon, along with the Federal Reserve's July policy meeting, are expected to provide further direction on AI spending and interest rates.
Copyright ⓒ Aju Press All rights reserved.