South Korea's KOSPI poised for strongest week since June on chip rebound

South Korea's benchmark KOSPI index was set to close the week with its strongest performance since June, driven by a rebound in major semiconductor stocks that account for a significant share of the index.

Heavyweight chipmakers, including Samsung Electronics and SK Hynix, surged as optimism over a potential recovery in global technology demand outweighed broader market concerns. The companies, which collectively represent a substantial portion of the KOSPI's weighting, led the advance following recent signs of stabilization in memory chip pricing and demand.

The KOSPI was last up 1.2% in midday trading, extending gains from earlier in the week and placing it on track for a weekly rise of approximately 4.5%. The index has lagged global peers in recent months amid weak export data and concerns over China's economic slowdown, but the chip-led rally has narrowed the gap.

Analysts attributed the uptick to a combination of technical buying and improved investor sentiment toward the technology sector. Memory chip prices have shown tentative signs of bottoming out after a prolonged slump, with spot prices for DRAM and NAND flash components stabilizing in recent weeks.

Samsung Electronics, South Korea's largest listed company, rose 2.1% on the day, while SK Hynix gained 1.8%, contributing to the index's upward momentum. The broader tech-heavy Kosdaq market also advanced, reflecting the sector-wide rebound.

The positive momentum comes despite ongoing macroeconomic headwinds, including elevated interest rates in key markets and geopolitical tensions. However, the chip sector's sensitivity to global demand cycles has positioned it as a key barometer for broader economic sentiment.

Investors will be closely monitoring upcoming earnings reports from major chipmakers, as well as guidance on demand trends in the second half of the year. Any signs of sustained recovery in memory chip pricing could further bolster the KOSPI's weekly gains.