South Korean stocks shrug off Nvidia crisis, chipmakers surge

South Korean stocks rallied on Friday, extending their strong weekly gains as investors shrugged off concerns over a leadership crisis at US chipmaker Nvidia and continued to bet on robust demand for semiconductors, Reuters reported.

The benchmark KOSPI rose 128.36 points, or 2.40%, to 5,471.09 as of 0130 GMT. The index was on track to post a weekly gain of 7.9%, reflecting sustained investor appetite for domestic equities despite uncertainty surrounding the global artificial intelligence sector.

Read more: Global Market Today: Asian stocks gain after Nvidia shakeup, oil steady


South Korea's semiconductor heavyweights led the advance, with Samsung Electronics climbing 2.64% and rival SK Hynix gaining 2.71%, according to Reuters. Concerns over instability at Nvidia, a key partner for the country's two largest listed companies, had raised questions about potential disruptions across the domestic semiconductor supply chain.

However, investors appeared to look beyond the developments at the US chipmaker, focusing instead on the underlying growth prospects of the AI industry and sustained demand for high-bandwidth memory and next-generation chips.

Reuters reported that analysts viewed the market as distinguishing concerns surrounding Nvidia's leadership from broader uncertainties in the AI industry. Foreign investors also remained net buyers of South Korean equities for a fourth consecutive session.

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Foreign investors purchased shares worth 161 billion won on Friday, providing further support to the market, Reuters reported.

Among other heavyweight stocks, battery maker LG Energy Solution advanced 1.06%. Automakers also posted strong gains, with Hyundai Motor rising 4.50% and Kia gaining 2.46%.

The South Korean won strengthened 0.29% to 1,331.6 per dollar on the onshore settlement platform, compared with its previous close of 1,335.5.

Meanwhile, bond markets witnessed selling pressure. December futures on three-year treasury bonds fell 0.13 points to 103.37. The yield on the most liquid three-year Korean government bond rose 3.9 basis points to 3.772%, while the benchmark 10-year yield climbed 9.3 basis points to 4.016%, Reuters reported.

The resilience of South Korean equities highlights investors' continued confidence in the country's semiconductor leaders, with the latest rally suggesting that concerns over Nvidia's executive turmoil have yet to undermine optimism about the longer-term AI investment cycle.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)