Seoul shares closed higher on Friday, ending a three-day decline, as robust earnings from U.S. chipmaker Broadcom eased concerns over an artificial intelligence bubble. The benchmark KOSPI gained 1.38 percent to 4,167.16. The local currency fell slightly against the U.S. dollar.
Seoul's stock market snapped a three-day losing streak on Friday, December 12, as investors' worries about a potential bubble in the artificial intelligence sector eased following Broadcom's strong earnings reported after the Wall Street close. The benchmark Korea Composite Stock Price Index (KOSPI) rose 56.54 points, or 1.38 percent, to close at 4,167.16. Trading volume was moderate at 421 million shares worth 16.3 trillion won ($11 billion), with 655 gainers outnumbering 221 losers.
Foreign investors net bought 41.3 billion won of local shares, while institutions purchased a net 1.41 trillion won. Individuals sold a net 1.46 trillion won. Han Ji-young, a researcher at Kiwoom Securities, said, "The strategy of expanding exposure to AI-related stocks will remain valid." This year's rally in major technology stocks had fueled bubble concerns, but Broadcom's results helped calm nerves.
The Korea Exchange (KRX) issued a warning advisory on SK hynix Inc., the second-largest company by market cap on the main bourse, after its sharp gains driven by strong memory chip sales amid the AI boom. However, analysts say it is unlikely to significantly affect the overall direction of chipmakers. Han added, "The current conditions in the semiconductor industry, its upward cycle and the earnings consensus remain intact." Stocks under advisory are barred from margin trading purchases.
SK hynix shares increased 1.06 percent to 571,000 won, and Samsung Electronics rose 1.49 percent to 108,900 won. LG Energy Solution fell 0.11 percent to 445,500 won. Samsung Fire & Marine Insurance plunged 22.3 percent to 489,500 won after an unexplained 28.31 percent surge the previous day. Hyundai Motor added 2.03 percent to 301,500 won, Kia gained 2.36 percent to 125,800 won, and Hanwha Aerospace surged 6.31 percent to 961,000 won.
The local currency was trading at 1,473 won per U.S. dollar at 3:30 p.m., down 0.7 won from the prior session. In the bond market, prices rose as yields fell: the three-year Treasury yield dropped 0.8 basis points to 3.093 percent, and the five-year benchmark shed 1.1 basis points to 3.35 percent.
