KOSPI Gains As The Index Finds Some Support At 2,500

After an eight-day downturn, the benchmark Korea Composite Stock Price Index (KOSPI) saw a notable rebound, climbing 2.34% to close at 2572.09. Some of the locally listed heavyweight tech giants in Samsung Electronics and SK Hynix both enjoyed significant gains. Samsung Electronics shares rose by 2.16%, ending the day at 66,300, while SK Hynix shares surged by an impressive 7.38%, closing at 168,800.

Looking at the 12 month chart on the KOSPI below, and it becomes clear to see that the 2,500, 2,600, and at the upper end 2,900 round levels have been switching between support and resistance. With some ways to go before retesting those higher levels, it is likely that traders will be watching the reaction to each round level with interest.

The bulls will be feeling more confident after the recent bounce off 2,500, but today's move could be more indicative of global semiconductor sentiment than a purely local one.

The rally in South Korea's primary stock market index paralleled positive movements in tech shares around the globe. This upturn was partially spurred by the surge in NVIDIA's stock, with the industry's leader closing out the day at $116.91, representing an 8.15% increase before continuing to push on in the pre-market session. The rally was influenced by comments from the CEO surrounding bullish demand, and rumours suggesting NVIDIA may expand exports to Saudi Arabia, potentially signalling expanded market access and larger revenue streams for the tech giant.

The tech rally also translated to positive outcomes for the secondary Korea Securities Dealers Automated Quotations (KOSDAQ) index, which rose by 21.61 points, marking a 3.1% increase to close at 731.39.

Specific sectors and companies received an added boost, with the likes of EcoPro BM and HLB leading the charge. Their stock price gains were attributed to market reactions to China's CATL decision to reduce lithium production and a broader recovery in artificial intelligence investment sentiment. These factors combined to showcase strong performances among selected businesses.

The upbeat market sentiment was mirrored in the currency markets where the South Korean won strengthened against the US dollar. Closing at 1338.7 won, the local currency inched 0.3 won lower, supporting the idea that improved market confidence may also be affecting forex trading.

In summary, the positive trend across both the KOSPI and KOSDAQ indices, bolstered by significant purchases from foreign and institutional investors, reflects a recovery phase in the South Korean stock market.

The tech sector, in particular, seems to have received a much-needed boost, which may indicate a more optimistic investment atmosphere following a period of bearish trends. The advance in NVIDIA's stock is also a noteworthy signal of potential for other companies in the semiconductor industry, as global economic patterns continue to influence market dynamics.