SEOUL, October 21 (AJP) - South Korean stocks rebounded more than 3 percent Wednesday morning as foreign buying lifted semiconductor shares following a sharp selloff.
The benchmark KOSPI climbed 3.28 percent to 5,735.14 as of around 9:50 a.m. (0050 GMT), after trading between 5,630.14 and 5,765.42.
Foreign investors bought a net 197.3 billion won worth of shares, while institutions purchased 45.3 billion won. Retail investors sold a net 406.4 billion won.
The rebound followed a 3.73 percent plunge in the KOSPI on Tuesday, when concerns over the profitability of massive artificial intelligence investments and financing pressures among data center operators weighed on technology shares.
SK hynix surged 7.11 percent to 1,310,000 won, while Samsung Electronics jumped 5.56 percent to 223,250 won, recovering part of their recent losses.
The recovery came as Nomura Securities maintained its bullish outlook for the global memory industry, arguing that concerns over AI investment profitability and China's technological advances had been overdone.
The Japanese brokerage set target prices of 4.7 million won for SK hynix and 670,000 won for Samsung Electronics, maintaining buy ratings on both stocks.
Nomura expects global memory demand to outpace supply through at least 2028, supported by continued expansion of data center infrastructure.
The brokerage projected new global data center capacity would increase from 22.3 gigawatts this year to 31.5 gigawatts in 2027, sustaining demand for memory chips despite concerns over slowing growth at some AI companies.
Nomura also estimated that combined revenue at OpenAI and Anthropic grew about 507 percent from a year earlier in the third quarter, suggesting that underlying AI demand remained strong despite questions over investment returns.
It played down concerns over Chinese memory maker ChangXin Memory Technologies (CXMT), while cautioning that sustained cuts or major delays to data center projects could weaken its demand outlook.
Other semiconductor-related stocks joined the rally. Samsung Electro-Mechanics rose 2.94 percent to 1,189,000 won, while SK Square gained 6.21 percent to 787,000 won.
Samsung Electronics' preferred shares advanced 4.94 percent to 174,100 won.
Despite the broader recovery, battery makers showed a weaker performance. LG Energy Solution fell 1.21 percent to 409,000 won, while Samsung SDI edged up 0.36 percent to 558,000 won.
Defense manufacturer LIG Nex1 plunged 11.31 percent to 486,000 won, making it one of the sharpest decliners among actively traded KOSPI stocks.
Daeduck Electronics slipped 0.08 percent to 132,200 won.
Semiconductor equipment and materials stocks led sector gains, advancing 5.79 percent, while biotechnology research equipment and services rose 5.42 percent.
Semiconductor-related themes also strengthened, with conventional chipmakers and chip production stocks each gaining 6 percent.
The tech-heavy KOSDAQ climbed 1.77 percent to 795.84, after trading between 792.59 and 803.68.
Foreign investors sold a net 59.4 billion won worth of shares, while institutions bought 40 billion won. Retail investors purchased a net 20.6 billion won.
Elice Group surged 29.92 percent to 79,900 won, hitting the daily upper price limit after plunging 32.04 percent on its trading debut Tuesday.
The AI cloud infrastructure company had closed its first session at 61,500 won, well below its initial public offering price of 90,500 won, amid concerns over the profitability and valuations of companies investing heavily in AI infrastructure.
The sharp reversal followed a recovery in U.S. neocloud operator CoreWeave, whose shares rebounded from steep intraday losses to close 1.65 percent higher.
Despite Wednesday's rally, Elice remained below its IPO price, highlighting the volatility surrounding AI infrastructure companies.
Elsewhere on the KOSDAQ, semiconductor-related stocks advanced, with Doosan Tesna surging 12.99 percent to 115,700 won and Jeju Semiconductor gaining 6.06 percent to 70,000 won.
Jusung Engineering rose 3.23 percent to 204,500 won, while HPSP gained 2.19 percent to 51,400 won.
Robotics stocks also posted strong gains. HT Robotics climbed 10.85 percent to 10,830 won, while Bigwave Robotics jumped 15.96 percent to 21,650 won.
Melon surged 23.18 percent to 14,880 won, while LS Materials advanced 6.02 percent to 13,910 won. Simtech edged up 0.65 percent to 124,800 won.
The Korean won strengthened 0.03 percent to 1,326.6 won per dollar.
Oil prices edged higher as investors weighed uncertainty over possible diplomatic progress between the United States and Iran against continuing supply risks in the Middle East.
West Texas Intermediate crude rose 0.6 percent to $98.40 a barrel, while Brent crude gained 0.6 percent to $109.42.
The modest gains followed reports of talks involving Pakistani and Iranian officials over U.S.-Iran negotiations, although a diplomat involved in the discussions reportedly dismissed suggestions that an agreement was imminent.
Oil prices remained supported by attacks on commercial vessels near the Strait of Hormuz and continued fighting involving Saudi Arabia and Yemen's Iran-backed Houthi rebels.
However, signs that Middle Eastern crude shipments had recovered to about 80 percent of prewar levels helped ease some supply concerns.
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