Global Market: South Korean shares rebound, but head for biggest weekly loss in 18 years

South Korean stocks rebound after a sharp selloff, but AI concerns keep investors on edge.

The benchmark KOSPI rose 131.07 points, or 2.36%, to 5,685.29 as of 0200 GMT. The recovery followed a nearly 8% plunge on Thursday, which dragged the index to its lowest close since April 7.

Despite Friday's gains, the index had fallen 14.3% so far this week, putting it on track for its third consecutive weekly decline and its steepest weekly drop since October 2008, during the global financial crisis.

The selloff has extended the KOSPI's losing streak to seven consecutive sessions, its longest run of daily declines since September 2024, as investors reassessed valuations and growth expectations linked to the global AI investment boom.

The latest rebound was supported by dip buying following the sharp losses, although foreign investors continued to sell South Korean equities.

South Korea's finance ministry said it would intensify monitoring of financial markets and closely assess the impact of recent stock market volatility on bond, foreign exchange and short-term money markets.

Technology stocks recovered alongside the broader market. Samsung Electronics rose 1.90%, while fellow chipmaker SK Hynix gained 1.82%.

Other heavyweight stocks also advanced. Battery maker LG Energy Solution climbed 0.62%, while Hyundai Motor and Kia Corp rose 6.77% and 5.52%, respectively. Steelmaker POSCO Holdings added 2.74%, and drugmaker Samsung BioLogics gained 4.33%.

Market breadth was positive, with 768 stocks advancing and 124 declining among the 914 issues traded.

Foreign investors, however, remained net sellers, offloading shares worth 307.8 billion won ($228.77 million), highlighting continued caution despite the market's recovery.

In currency markets, the South Korean won weakened 0.30% to 1,346.1 per dollar on the onshore settlement platform, compared with its previous close of 1,342.0.

In fixed-income markets, December futures on three-year Korean Treasury bonds rose 0.01 point to 102.96. The benchmark three-year Treasury yield increased 0.8 basis points to 3.877%, while the 10-year yield edged up 0.3 basis points to 4.205%.

Investors remained focused on whether the recent correction in AI-linked stocks would deepen or create opportunities for bargain hunting. While Friday's gains offered some relief after the prolonged selloff, the KOSPI's steep weekly decline underscored persistent concerns about valuations and the durability of the global technology rally.