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Thetwo economies now risk entering a tech version of the “resource curse,” writes William Pesek.
Kospi Index jumped by over 4% on Wednesday as companies in the memory industry bounced back. It rose to 5,772 points, up modestly from this week's low of 5,465, mirroring what happened in the United States where the Dow Jones, Nasdaq 100, and S&P 500 soared.
Shares of cloud provider Elice Group dropped 30% during their market debut in South Korea. Elice Group has been compared to CoreWeave, the U.S. neocloud at the center of last week's sell-off.
South Korean and Japanese stocks fell on Tuesday despite an overnight rebound in US technology shares, as investors remained unwilling to rebuild exposure to Asia's biggest artificial intelligence trades before a crucial earnings week. The KOSPI was down 2.36% at 5,631.95 by 11:20 am in Seoul, after touching 5,493.24.
South Korean and Japanese stocks rebounded on Wednesday as investors returned to semiconductor and AI shares hammered in Tuesday's rout, though the recovery stopped well short of signalling an all-clear. The KOSPI was up about 1.5% at 6,123 by 11:30 am in Seoul after briefly gaining more than 2%, while the Nikkei 225 rose 0.61% to 68,193.13 at Tokyo's midday break.
South Korean stocks struggled to turn Micron Technology's record earnings into a lasting rally on Thursday, leaving the KOSPI near flat even as Japan's Nikkei 225 surged on renewed enthusiasm for semiconductor shares. The KOSPI recovered from an early 0.34% decline to trade around 6,805 by late morning, while Samsung Electronics and SK Hynix erased opening losses.
Asian stocks came under renewed pressure on Tuesday as rising oil prices and a global bond selloff pushed borrowing costs higher, but the damage was uneven across the region's two major technology-heavy markets. Japan's Nikkei 225 fell about 1.2% to 65,070.58 in early trade, while South Korea's KOSPI was down a much smaller 0.2% near 6,877 late in the morning.
It's strange, but: Franklin FTSE South Korea ETF (FLKR) seems to trade at a steep discount despite robust earnings growth expectations. FLKR is highly concentrated, with nearly 50% exposure to memory giants SK Hynix and Samsung, making it more a play on the memory cycle than broad Korea. Current valuations seem to be below the KOSPI's 10-year average, while consensus expects EPS growth for large caps.