KOSPI Rebounds on Semiconductor Stocks Amid Global Market Uncertainty

The KOSPI index rebounded on Friday after an early decline, while Japan's Nikkei 225 fell about 1%. The recovery in South Korea was driven by semiconductor stocks, particularly Samsung Electronics and SK Hynix. These companies gained 0.09% and 0.44%, respectively, following a strong earnings report from Micron.

The memory trade is providing support for the KOSPI index, according to analysts. Macquarie sales note cited by MarketWatch this week argued that memory supply could become significantly tighter through 2027 and 2028. The market may still be underestimating the value of long-term agreements secured by SK Hynix.

However, foreign investors remain hesitant to invest in South Korean equities due to US yields and dollar strength. This has led to sustained overseas selling, which is a constraint on the KOSPI index. Domestic investors are providing support for the index, but the recovery was muted ahead of the US jobs report.

In contrast, Japan's Nikkei 225 fell about 1% after its sharp rally a day earlier. The decline was led by technology, automobile, and pharmaceutical shares, with SoftBank Group dropping 5.6%, Honda Motor losing 1.8%, and Chugai Pharmaceutical falling 2.4%. Japanese equities are also facing a more complicated domestic rates backdrop due to rising core inflation.