Seoul shares end higher on institutional buying amid AI investment concerns

Seoul shares saw a gain on Monday, driven by institutional investment, as traders grappled with doubts about whether significant investments in artificial intelligence (AI) infrastructure would result in adequate returns. The Korean won strengthened against the U.S. dollar. Following an initial drop of 3.17 percent, the benchmark Korea Composite Stock Price Index (KOSPI) rebounded to close with a gain of 99.96 points, or 1.76 percent, reaching 5,768.01 after dipping to a low of 5,488.41.

Institutional investors purchased a net 574.66 billion won (US$432 million) worth of shares, while foreign and individual investors sold a net 37.87 billion won and 1.09 trillion won, respectively. Concerns persisted as investors anticipated earnings reports from major companies such as Tesla and Meta Platforms, as well as the upcoming U.S. midterm elections on November 3.

Analysts noted that investors may have acquired large-cap stocks on the lookout for bargains following substantial declines over recent weeks, contributing to the index's positive movement despite reservations stemming from the substantial spending on AI infrastructure projects.