South Korean Stocks

South Korean stocks are in a technical bull market, driven by renewed global AI investment. The Kospi has rallied significantly, led by chip giants Samsung Electronics and SK Hynix. This recovery, fueled by strong tech earnings and memory chip outperformance, signals growing investor confidence. While further upside is possible, a return of rising US Treasury yields and the dollar could temper the rally. For now, South Korea and memory stocks offer attractive near-term risk-on opportunities.

Foreign investors are selling billions in South Korean stocks, despite the Kospi’s strong performance. This selling, particularly in tech and auto sectors, is attributed to portfolio rebalancing as Korean equities’ weightings increase in global benchmarks, triggering regulatory ownership limits. Domestic buying, driven by retail investors, more than offsets these outflows, with analysts remaining bullish on Korea’s fundamental outlook.