Kospi Rebounds 2.7% as Chip Stocks Return, Sensex Climbs

Kospi rebounded 2.7% to about 5,703 on chip and AI buying, while India's Sensex rose over 1% on Rubio's trade deal remarks, lifting financial markets today.

Lead

South Korea's Kospi rebounded 2.7% to about 5,703 on Wednesday as investors returned to semiconductor and artificial intelligence shares a day after a sharp sell-off. India's Sensex gained more than 1%, adding roughly 750 points, after US Secretary of State Marco Rubio said a trade agreement with New Delhi could be reached in weeks rather than months. The moves marked a risk-on turn across financial markets today, following a strong session on Wall Street.

What Drove the Kospi Rebound?

The Kospi rebound was driven by renewed buying in memory chipmakers, which had led Tuesday's 3.7% decline to 5,552.74. SK Hynix (000660.KS) and Samsung Electronics (005930.KS) both recovered, rising roughly 5% to 6% at the session's strongest point.

Tuesday's sell-off reflected worries over the return on AI infrastructure spending. The Philadelphia Semiconductor Index has been on its longest losing streak since 2008, and the debut of Korean AI firm Elice, which fell 32% on its first day of trading, added to the unease. Elice shares hit their 29.9% daily upper limit on Wednesday.

Overnight, US sentiment improved. The Dow Jones Industrial Average rose 1.0% to 52,495.88. Super Micro Computer (SMCI) jumped about 15% after preliminary quarterly sales of $18.5 billion to $19.5 billion, well above the roughly $15 billion consensus. The result eased concerns that AI hardware demand is fading.

Kospi's rebound still leaves the index well below its recent highs. It fell 5.46% on Oct. 13 alone, and Korean equities remain among the more volatile major benchmarks.

Why Did the Sensex Rise on Rubio's Comments?

The Sensex rose because Rubio's comments gave investors a nearer timeline for a US-India trade agreement. He said only technical details remain to be settled and that a deal could arrive within weeks. The Nifty 50 reclaimed the 23,000 level, led by information technology and banking shares.

For Indian exporters, a deal would ease the tariff burden that has weighed on sentiment. IT services, textiles and engineering goods are among the sectors most exposed to US demand. The rally in India was also supported by a softer dollar and a rebound in Asian technology shares.

How Did the Rest of Asia Trade?

Gains were uneven across the region. Japan's Nikkei 225 added 0.85% to 64,621.24, and the MSCI Asia Pacific Index rose 0.9%. Greater China lagged: Hong Kong's Hang Seng fell 0.7% to 23,707.11 and the Shanghai Composite lost 0.6% to 3,713.36, with weak earnings from battery maker CATL weighing on sentiment.

What Risks Remain for Asian Equities?

The main risks are energy prices and bond yields. Brent crude briefly topped $111 a barrel before settling near $108.79, down 0.69%, after reports of a US-Iran peace agreement proved inaccurate. The US 10-year Treasury yield eased 2.6 basis points to 5.117%, still a level that raises discount rates for growth stocks and pressures import-dependent economies such as India.

The dollar weakened broadly, which usually supports Asian currencies and equity inflows. Whether that holds depends on oil and on the next round of AI-sector earnings.

Outlook

Wednesday's gains recovered part of the previous session's losses but did not resolve the underlying questions. Kospi direction depends on whether chip earnings confirm AI spending plans, while the Sensex now depends on how quickly the US-India trade talks move from statements to a signed text. Elevated oil prices and a 5% US 10-year yield keep volatility high across Asian equity markets in the coming weeks.