South Korean Stocks Surge 22% Led by AI Chipmakers

South Korean stocks surged approximately 22% from a July 30 low, with the benchmark Kospi index gaining as much as 4.8% on Thursday. The rally is primarily driven by Samsung Electronics Co. and SK Hynix Inc., both of which rose over 5% amid a global rebound in AI-related trading and continued spending by Big Tech firms.

This recovery follows a historic rout in July, which marked the market's worst month since the global financial crisis. That decline was exacerbated by the liquidation of leveraged bets. Market stability has since been supported by government curbs on single-stock leveraged ETFs and a subdued US inflation report that eased concerns regarding Federal Reserve interest-rate hikes.

While foreign investors have remained net sellers this year, withdrawing over $100 billion, some overseas funds are returning as valuations become more attractive. Investment specialists note that limited supply capacity has created a bottleneck for exploding memory demand, contributing to the current upward momentum.