Global Market: KOSPI gains as AI-driven chip demand lifts South Korean export

South Korean shares rose on Tuesday, September 1, after preliminary data showed the country’s exports recorded another month of strong growth, helped by robust demand for semiconductors linked to the artificial intelligence boom. The Korean won weakened against the US dollar, while government bond yields moved higher.

The benchmark KOSPI was up 22.72 points, or 0.33%, at 6,842.74 as of 0104 GMT. The index has gained 62.37% so far this year.

Chip stocks lead gains

Technology stocks supported the broader market, with Samsung Electronics rising 0.29% and SK Hynix gaining 1.61%. Battery maker LG Energy Solution advanced nearly 2%.


Other major stocks traded mixed. Hyundai Motor declined 0.87%, while Kia gained 0.31%. POSCO Holdings climbed 2.66%, whereas Samsung Biologics fell about 1%.

Of the 901 stocks traded, 306 advanced and 540 declined, indicating that gains in index-heavy shares masked broader weakness in the market.

Foreign investors were net sellers, offloading shares worth 116.5 billion won.

Exports extend growth streak

South Korea's exports surged 68.7% in August from a year earlier, extending their growth streak to 15 consecutive months and exceeding analysts' expectations.

Reuters reported that the stronger-than-expected export performance highlighted the continued strength of global technology demand, particularly for semiconductors used in artificial intelligence applications.

The export data provided support to South Korean equities despite selling pressure from foreign investors and weakness across a large number of individual stocks.

Won weakens against dollar

The Korean won weakened against the US dollar. The currency was quoted at 1,369.2 per dollar on the onshore settlement platform, down 0.09% from its previous close of 1,368.0.

In offshore trading, the won was quoted at 1,369.7 per dollar, down 0.2% on the day. Its one-month non-deliverable forward contract was quoted at 1,369.1.

Despite Tuesday's decline, the won has strengthened 5.1% against the dollar so far this year.

Korean bond yields rise

South Korean government bond yields moved higher, reflecting a broader rise in borrowing costs.

The September futures contract on three-year Treasury bonds fell 0.10 point to 103.13. The most liquid three-year Korean Treasury bond yield rose 4.1 basis points to 3.878%, while the benchmark 10-year yield climbed 5.8 basis points to 4.371%.

The rise in yields came alongside gains in equities, as investors assessed the stronger export outlook and the implications of resilient technology demand for South Korea's economy.

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