South Korea’s Kospi, Samsung, SK Hynix: meltdown to record rebound
TOPSHOT – Currency dealers monitor exchange rates in a foreign exchange dealing room at the Hana Bank headquarters in Seoul on February 2, 2026. South Korea’s benchmark index Kospi tumbled more than five percent on February 2, in line with a sell-off across Asian markets amid fresh worries about an AI-fuelled tech rally that has sparked fears of a bubble in the sector. (Photo by Jung Yeon-je / AFP via Getty Images)
Jung Yeon-je | Afp | Getty Images
South Korea’s stock market staged its sharpest reversal on record on Friday, capping a month of wild swings that underscored how tightly the country’s equity market has become tied to the global artificial intelligence trade.
The benchmark Kospi surged 14%, on track for its largest one-day jump, data from LSEG showed. SK Hynix similarly saw a record rebound, while Samsung Electronics soared.
“The Korean stock market has been trading as if it has bipolar disorder, swinging from panic to euphoria almost overnight,” said Jung In Yun of Fibonacci Asset Management. “Today’s move looks like a violent reversal of an extremely crowded selloff.”
The rebound followed a powerful overnight rally in U.S. technology stocks after upbeat earnings from Microsoft, Amazon and Meta reinforced expectations that spending on artificial intelligence infrastructure remains robust. Additional support also came after SK Group Chairman Chey Tae-won disclosed purchases of SK Hynix shares, bolstering confidence in the world’s second-largest memory chipmaker.
Jung said foreign investors appeared to be the main force behind Friday’s rally, while short-covering and mechanical rebalancing by leveraged exchange-traded funds amplified the gains.
New cash-deposit requirements for leveraged ETF investors, which took effect on July 31, may also have contributed to repositioning.
We’re going to get a lot more days like this. Asset prices are completely disconnected.
Paul Gambles
MBMG Family Office Group
“I would not expect gains of this magnitude to continue,” Jung told CNBC via email. “However, the rebound itself could have further room because positioning had become extremely bearish and SK Hynix’s underlying AI-memory fundamentals remain strong.”
He added, “the real test will be whether foreign buying continues after today’s short-covering fades. If it does, this could develop into a more durable recovery.”
The dramatic rebound comes just days after Korean equities suffered one of their worst selloffs as concerns over stretched AI valuations, rising leverage and signs of forced liquidations rippled through global semiconductor stocks.
Rolf Bulk, semiconductor analyst at Futurum Group, said the latest rally reflects improving confidence that the AI investment cycle remains intact rather than a wholesale shift in fundamentals.
“We’ve seen unprecedented volatility in the Korean stock market over the last month, culminating in this recovery on the final trading day,” Bulk said.
Bulk added that recent forced selling appears to have largely run its…
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