Improving corporate fundamentals helped South Korean equities reverse early losses triggered by Wall Street's concerns regarding artificial intelligence spending. October export figures provided significant support, registering their fastest expansion in more than 50 years on the back of resilient chip demand. However, broader macroeconomic indicators signaled underlying friction, as factory activity expanded at its weakest pace in eight months amid softening output. Meanwhile, foreign investors remained cautious, net selling 344 billion won worth of equities during the session.
Key points
Robust global demand for semiconductors continues to provide crucial fundamental support…: Robust global demand for semiconductors continues to provide crucial fundamental support for South Korean financial assets.
A domestic factory activity slowdown to an eight-month low highlights ongoing divergence…: A domestic factory activity slowdown to an eight-month low highlights ongoing divergence across different sectors of the economy.
President Lee Jae Myung is targeting long-term economic expansion by committing state bud…: President Lee Jae Myung is targeting long-term economic expansion by committing state budget resources toward domestic artificial intelligence investments.
Sources checked by our analysis pipeline: 1
The benchmark KOSPI rose 19.49 points, or 0.34%, to 5,750.23 as of 0157 GMT, recovering after falling nearly 2% earlier in the session.
The index opened lower, tracking losses on Wall Street amid concerns over massive investments by artificial intelligence companies and the sustainability of spending on the emerging technology. However, investors stepped in to buy beaten-down stocks, supported by improving corporate fundamentals and a stronger export outlook, Reuters reported.
Read more: Global Market Today: Asian shares bend under AI stress; Apple earnings loom
South Korea's exports nearly doubled in October, marking their sharpest increase in more than 50 years, as robust global demand linked to artificial intelligence investments boosted shipments of semiconductors.
According to Reuters, analysts said the stronger-than-expected export performance could support further upward revisions to corporate earnings forecasts, strengthening the case for buying stocks after recent declines.
However, a separate survey showed that South Korea's factory activity expanded at its slowest pace in eight months in October, reflecting weaker output and demand.
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