South Korean shares rebounded sharply on Friday after a major sell-off in technology stocks wiped hundreds of billions of dollars from the country’s stock market earlier in the week.

The benchmark Kospi index closed nearly 18% higher, driven largely by strong gains from major chip manufacturers SK Hynix and Samsung Electronics.

The recovery came after positive earnings updates from US technology giants Amazon and Microsoft boosted investor confidence in continued investment in artificial intelligence (AI) technology.

South Korean regulators also announced measures aimed at stabilising markets and limiting the impact of the recent decline.

Chip Stocks Lead Market Recovery

SK Hynix, a key supplier of advanced AI chips to Nvidia, saw its shares rise by almost 30%, while Samsung Electronics gained around 28%.

Both companies had suffered significant losses earlier in the week as concerns grew over the massive spending by technology companies on AI infrastructure.

Investors have questioned whether the hundreds of billions of dollars being invested into AI will generate enough returns, leading to increased volatility in AI-related stocks.

Wider Asian Markets Also Rise

The surge in South Korean chip stocks helped lift markets across Asia, with shares in Japan and Taiwan also benefiting from renewed optimism around the technology sector.

South Korea’s stock market has experienced increased volatility in recent months, partly due to growing participation from retail investors.

The latest rebound highlights the continued influence of AI-related companies on global markets, with investor confidence closely tied to expectations about the future growth of artificial intelligence.