KOSPI jumps 2.4% as cooling US inflation lifts global tech stocks

The KOSPI surged 2.41 percent to 6,977.34 points on Friday, capping an 11.5 percent weekly gain that snapped a seven-week losing streak, as cooling US inflation eased bets on a September Federal Reserve hike.

"The easing of US monetary policy uncertainty has become the catalyst for the tech rebound," said Yugo Tsuboi, chief strategist at Daiwa Securities. "Inflation shows no sign of worsening, and excessive fears of a hawkish Fed are fading, drawing funds into high-growth stocks."

The Nikkei 225 rose 0.59 percent to 68,713.80 points, while the Topix added 0.5 percent to 4,197.20. Samsung Electronics climbed 2.43 percent to 274,500 won and SK Hynix advanced 3.26 percent to 1,645,000 won, both up more than 15 percent over five sessions. Kioxia gained 3.75 percent to 53,740 yen and SoftBank Group rose 2.94 percent to 5,739 yen. The Philadelphia Semiconductor Index added 0.5 percent Thursday to its highest since mid-July, and an Asian chip index rose nearly 1 percent Friday.

Foreign investors bought roughly $2 billion of South Korean stocks this week, on track for the largest weekly inflow since early April after months of outflows exceeding $100 billion. The 30-year Treasury auction yield hit a quarter-century high, reflecting investor demands for higher compensation on a widening fiscal deficit.

Rate-Hike Odds Halve as Inflation Cools

The Bureau of Labor Statistics reported headline CPI rose 0.1 percent in July, pulling the annual rate to 3.4 percent from 3.5 percent in June. The Producer Price Index was flat month over month, with the annual rate cooling to 4.7 percent from 5.5 percent. CME FedWatch odds of a September hike fell from 55 percent before the CPI release to about 35 percent by Friday.

The two-year Treasury yield held near 4.15 percent Friday after falling 6 basis points the prior day, while the yield curve steepened for a third straight week. "Data ahead of the September meeting will be critical," said Stephen Juneau, economist at BofA Securities. "Markets have increasingly begun pricing in a hike because recent data has leaned dovish."

US megacap tech stocks rose in premarket trading, with Micron up 1 percent, SpaceX up 0.5 percent and Tesla up 0.3 percent. Amazon and Alphabet added 0.1 percent, while Nvidia and Apple were flat. Meta and Microsoft slipped 0.1 percent.

The rebound follows SanDisk's announcement that it will return excess cash to shareholders after completing its investment business, a move that pushed its shares up more than 13 percent and lifted Asian memory-chip makers. SK Group Chairman Chey Tae-won said the company is considering building new memory-chip plants through joint ventures to share capital expenditure burdens, and warned that tight supply could intensify into 2027.

"Massive hyperscaler capital is flowing into hardware, translating directly into very strong sales and profit growth for hardware companies," said Hitoshi Asaoka, chief strategist at Asset Management One. "Investors are returning to a logic of re-examining corporate earnings themselves."

The yen traded near 159.40 per dollar Friday, holding around the 160 level despite reports the government of Prime Minister Takaichi Sanae supports rate increases. Brent crude rose to about $87.55 a barrel and WTI gained 1 percent to $82.08, while spot gold fell 0.5 percent to $4,330 an ounce.

This article is for informational purposes only and does not constitute investment advice.