South Korean battery makers return to Q2 profit

South Korean shares experienced a significant surge, with the benchmark Kospi index closing nearly 18% higher. This rally was driven by strong performances from chip makers SK Hynix and Samsung Electronics. The optimism stemmed from earnings updates from tech giants Amazon and Microsoft, signaling substantial investments in artificial intelligence (AI).

In response to the market turmoil, South Korean regulators introduced measures to prevent further sell-offs. The surge in chip stocks also contributed to market gains in Japan and Taiwan. SK Hynix, a key supplier to AI chip leader Nvidia, saw its shares rise by almost 30%, while Samsung increased by 28%. Both companies had faced a sharp decline in stock market value due to the intensifying sell-off in AI-related stocks.

Investors had expressed concerns over the hundreds of billions of dollars being invested in AI by major technology firms. South Korea's tech-heavy Kospi, which has been halted several times this year under a circuit breaker mechanism, had more than doubled in value this year. Despite multiple significant drops since reaching a record high in mid-June, the index remains over 50% higher than it was at the end of 2025.

Shares of AI-related companies also surged after Amazon and Microsoft exceeded earnings expectations. Amazon's stock jumped over 9% in after-hours trading in New York on Thursday, while Microsoft gained more than 15%.