(July 10): South Korean shares rose more than 2% on Friday but still ended a bruising week lower, as investors balanced revived enthusiasm for AI against concerns over earnings durability and product-related risks.
The benchmark Kospi closed 2.5% higher after rising as much as 5.7% and triggering a sidecar trading curb for the third time this week, while the broader MSCI EM Asia gauge climbed 1%.
The Kospi still lost 7.6% for the week and has declined 18% since reaching a record high in mid-June. Among heavyweights, chipmaker Samsung Electronics rose 2.52% on Friday, while peer SK Hynix lost 0.27%.
SK Hynix priced its American Depositary Receipts at US$149 on Thursday to raise about US$26.5 billion (RM107.7 billion), according to a US regulatory filing, highlighting strong investor appetite for the company, which is a pivotal cog in AI supply chains.
"SK Hynix managed to shrug off a volatile few weeks in tech/AI (and US equities more broadly) in the run-up this listing, suggesting enduring, if not entrenched, AI optimism," said Vishnu Varathan, head of economics and strategy at Mizuho Bank.
Varathan noted that the re-emergent AI optimism has also shrugged off the breakdown of the US-Iran ceasefire, which threatens to revive the 'Iran-Hormuz crisis'.
The renewed attacks in the Middle East have brought oil prices, inflation and global interest rates back into focus, but investors are brushing aside concerns about energy supplies and focusing on semiconductor and AI firms.
In Southeast Asia, equities in Thailand and the Philippines, both net oil importers, were up 0.6% and 1%, respectively.
Singapore's benchmark stock index advanced as much as 0.7% to a record high for the sixth consecutive day, with major lenders driving gains. The benchmark was poised to end the week up 4% — its best showing since mid-April last year.
Malaysian shares gained 1% to hit their highest in nearly three weeks, while the ringgit weakened to 4.063 per dollar.
The country's central bank on Thursday kept its benchmark interest rate at 2.75% for a sixth straight meeting, amid moderate inflation and sustained economic growth.
Among other currencies in the region, the Thai baht, the Singapore dollar and the Indonesian rupiah inched higher, while the South Korean won gained around 0.4%. The Philippine peso was up 0.2%.
South Korean Deputy Finance Minister Moon Ji-sung said the supply-demand dynamics of the local currency market are expected to shift in the second half of 2026, anticipating that dollar holdings from exporters will generate inflows via FX forwards.
The Bank of Korea's rate decision is due next Thursday. Analysts at Standard Chartered said the central bank is expected to increase the base rate to 2.75%.
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