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(Bloomberg) — South Korean stocks have erased the slide triggered by the Iran war, driven by a rally in chipmakers as escalating US–Iran tensions bring the artificial intelligence trade back into investor focus.
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The Kospi climbed as much as 1.2% Monday to more than 6,200, with memory firms Samsung Electronics Co. and SK Hynix Inc. the biggest boosts. The benchmark is up nearly 50% this year, making it one of the world’s best-performing equity markets.
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Korean shares have mounted a sharp turnaround from the early days of the Middle East conflict, when surging oil prices triggered a historic selloff in the energy import-dependent market and pushed it to the brink of a bear market. Since then, sentiment has stabilized on fundamental improvements across semiconductor and industrials, prompting Goldman Sachs to lift its Kospi target to 8,000.
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South Korea’s “equity market is fundamentally driven by global semiconductors and investment in power infrastructure and defense, rather than episodic geopolitical or energy shocks,” said Gary Tan, a fund manager at Allspring Global Investments. “With memory pricing still elevated and global AI and power‑related capex remaining robust, Korean equities should stay well supported into year‑end.”
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SK Hynix shares jumped as much as 3.4% on Korea Exchange ahead of its earnings this week, after saying it has begun production a next-generation memory module designed for Nvidia’s Vera Rubin platform. It plans to closely collaborate with Nvidia to solve bottlenecks in AI infrastructure and provide optimal performance.
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Samsung Electronics’ results earlier this month provided some reassurance for investors. The chipmaker posted an eightfold jump in quarterly profit, underscoring robust demand and allaying concerns that the US‑Iran conflict would dent spending on AI hardware.
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“Korea and Taiwan have benefited from strong earnings momentum in their technology sectors,” said Jarrid Klug, senior equity portfolio manager at DWS Group. “Growth in other regions has been significantly weaker.”
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—With assistance from Kurt Schussler.
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