Asian stock markets experienced a significant rebound on Tuesday, following a broad sell-off in the region's chip sector the previous day.
The Kospi index in South Korea surged by 8.2%, while Japan's Nikkei 225 index rose by 2%. This recovery came after these tech-heavy indices had posted similar-sized declines in the prior trading session.
Shares of the chipmaking giants that dominate the South Korean market, Samsung Electronics and SK Hynix, soared by 9.5% and 16.4% respectively. On Monday, their shares had closed down by 10.2% and 7.7%.
This bounce was driven by strength in the U.S. stock market on Monday, where the Nasdaq Composite index advanced 0.9% and the broader S&P 500 index edged up 0.3%. Intel led the gains with an 11.1% jump, while Marvell Technology rose 9.6% and Micron Technology gained close to 10%.
Influenced by investor bets on a coming boom in artificial intelligence, Asian chip-heavy indices, particularly South Korea's Kospi, have reached new highs for the year. Since January, the South Korean index has nearly doubled in value, ranking among the world's best-performing stock markets.
Market volatility has also intensified, with South Korea's stock market triggering its temporary circuit-breaker mechanism 12 times so far this year.
Lee Chan-hee, Executive Partner at Petra Capital Management, stated, "The market was oversold yesterday, so today's rebound was to be expected."
He added, "Samsung Electronics and SK Hynix have an extremely high weighting in the index. The near 10% surge in Micron Technology overnight naturally lifted these two Korean companies' share prices, which in turn pushed up the Kospi index."
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