SEOUL: South Korean stocks sprinted to record highs on Monday as legions of retail "ant" investors swarmed into chipmakers, riding a fresh wave of artificial intelligence-fuelled optimism sparked by a rally in U.S. peers and upbeat data.
Heavyweights Samsung Electronics and SK Hynix led the charge, rising 6.3% and 11.5%, respectively, with both chipmakers hitting life-time peaks.
The rally highlights how surging global demand for AI hardware is now the dominant force in equity markets, propelling South Korea's chip-heavy benchmark into the ranks of the world's top-performing major indices.
Samsung, the world's top memory chipmaker, last week became only the second Asian company after Taiwan Semiconductor Manufacturing Co (TSMC) to crack the trillion-dollar club, cementing South Korea's place as a key benchmark of the AI trade.
The benchmark KOSPI closed up 324.24 points, or 4.32%, at 7,822.24, after earlier tripping a "sidecar" trading curb having jumped 5.35% to a record high of 7,899.32.
The index, which rose 13.6% last week in its biggest weekly jump since late 2008, looks set to break 8,000 less than a week after topping the 7,000 mark for the first time.
The outsized gains make South Korea the best performing major market this year with an 86% surge so far on top of a 76% rally in 2025, buoyed by an AI-driven 150% surge in chip exports in the first 10 days of May alone.
The Philadelphia Semiconductor Index rose 5.5% on Friday, as chipmaker Micron Technology surged 15.5%, while Apple and Intel also rallied on a report of their deal on chip production.
In the currency market, the won was fetching 1,472.4 per dollar , 0.69% lower than its previous close at 1,462.3.
ANTS LEAD RALLY
Retail investors spearheaded Monday's rally in the KOSPI, which outpaced Japan's Nikkei and stocks in China and Taiwan. They net bought shares worth 2.9 trillion won ($1.97 billion), while foreigners were net sellers of 3.5 trillion won.
"There is profit-taking pressure rising among all investor groups, so it is necessary to note that short-term volatility can grow in semiconductor stocks as the KOSPI extends gains this week," said Han Ji-young, an analyst at Kiwoom Securities.
The Financial Supervisory Service (FSS) warned retail investors against chasing short-term gains, urging a reassessment of risks behind a sector-led rally at a rare briefing on Monday.
"The FSS is closely monitoring the trend of leveraged stock investments and risk management by securities brokerages and will take pre-emptive measures if needed to ensure market stability," it said in a statement.
Retail investors' borrowed investments in KOSPI shares stood at 24.9 trillion won as of Friday, just short of a record 25.0 trillion won hit in late April.
They have bought 7.5 trillion won of KOSPI shares so far this month, with Samsung Electronics and SK Hynix accounting for 3.7 trillion won.
So far this year, Samsung Electronics and SK Hynix have risen more than 120% and 160%, respectively, compared with a 15% rise in U.S. chipmaker Nvidia and a 44% rise in Taiwan's TSMC. On Monday, of the total 897 traded issues, 147 shares advanced, while 738 declined. - Reuters
