The Kospi Index staged a strong recovery, climbing 15% from its monthly low to 7,377, as heavyweight technology stocks Samsung and SK Hynix soared. The rally came ahead of a crucial interest rate decision by the Bank of Korea, with economists polled by Reuters and Bloomberg expecting a 50-basis-point hike to 3.25% as the central bank battles inflation, which hit a 30-month high of 3.2% in June.
Inflationary pressures have been fueled by soaring energy prices during the US–Iran conflict and massive bonuses in the tech sector amid the artificial intelligence boom. Trade data released before the decision showed exports surged 70.7% on strong semiconductor demand, while imports rose 30%, leading to a trade surplus of $30 billion, slightly missing the $36.15 billion forecast.
Samsung shares jumped over 7% on rumors it is considering raising capital in the United States, potentially following SK Hynix, which debuted on the Nasdaq last Friday. Samsung’s smartphone unit also outperformed, capturing 22% of the global market as overall sales fell 4%. SK Hynix surged 12.8% and SK Square 20%, driven by a Barclays forecast that the stock could double.
Despite the day’s gains, technical analysis suggests caution. The Kospi remains below the 50-day exponential moving average and the 23.6% Fibonacci retracement level, and Wyckoff distribution phase patterns point to a possible decline toward the 5,848 support area.
