Volkswacht Bodensee - Tech rebound fuels record-breaking rally in South Korean stocks

After four weeks of blood-letting fuelled by worries over the vast sums being invested in artificial intelligence, traders raced to pick up bargains following a series of strong earnings.

Seoul's Kospi had been at the forefront of the sell-off after hitting a record high a month ago, with chipmakers SK hynix and Samsung the poster children of the rout, losing around half their value in the panic.

However, the voracious buying sentiment that had characterised markets for much of the past two years was back as bargain hunters returned and traders took heart in a series of announcements.

US giants Microsoft and Amazon this week unveiled healthy earnings that saw their shares storm higher on Wall Street, helping the Nasdaq pile on almost three percent.

Analysts note that while tech firms have suffered heavy selling in recent weeks, that was focused on concerns about when the huge sums invested in AI would see returns, rather than fundamental problems in the sector.

The Kospi's eye-watering rally was helped by news South Korea's government planned to pump almost $14 billion into its sovereign wealth fund for AI investments and data centres.

That came after officials pledged to introduce measures to curb retail traders' access to leveraged exchange-traded funds, including limits on individuals' investment in them, which had been partly blamed for the recent panic-selling.

SK hynix surged 27 percent at one point -- clawing back its losses over the previous two days -- helped by the confirmation that Chey Tae-won, chair of parent company SK Group, had bought around $3 million worth of shares, his first purchases in a personal capacity.

The move was seen as a major vote of confidence in the company after the rout.

Samsung Electronics spiked more than 20 percent.

- 'Improving fundamentals' -

The buying spree was mirrored in Tokyo's five percent rally, with tech giant Advantest piling on almost 20 percent and tech investment titan SoftBank almost as much.

Taipei jumped more than seven percent thanks to an eight percent jump in chipmaker TSMC.

Shanghai, Sydney, Wellington and Manila were also up, though there were small losses in Hong Kong and Singapore.

"Today's rebound looks like a relief rally, but it is supported by improving fundamentals rather than bargain-hunting alone," said Jung In Yun of Fibonacci Asset Management Global.

The yen held its gains against the dollar after rallying Thursday amid speculation that Japanese authorities intervened to prop up the currency, which had been sitting around 40-year lows.

The Japanese unit strengthened to 158.98 to the greenback -- its best level since mid-May -- from more than 163 before paring the gains.

The currency has come under increasing pressure from the wide gap between Japanese and US interest rates, and expectations the Federal Reserve will hike soon, while the Bank of Japan has been slow to do so despite elevated inflation.

Forecasts for an intervention had been growing as the yen last month weakened past 160 per dollar, the level at which the government last stepped in by spending more than $70 billion in May.

Oil prices dropped again, extending Thursday's retreat, amid easing Middle East tensions after Donald Trump on Thursday announced an agreement for the "complete disarmament" of Iran-backed Hamas.

The US president called it a critical step toward a new Palestinian government in Gaza.

- Key figures around 0210 GMT -

Seoul - Kospi: UP 13.9 percent percent at 6,368.53

Tokyo - Nikkei 225: UP 5.1 percent at 65,016.15

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 25,702.33

Shanghai - Composite: UP 1.1 percent at 3,844.60

Dollar/yen: DOWN at 160.54 yen from 162.61 yen on Thursday

Euro/dollar: DOWN at $1.1516 from $1.1529

Pound/dollar: DOWN at $1.3457 from $1.3468

Euro/pound: DOWN at 85.58 pence at 85.60 pence

West Texas Intermediate: DOWN 1.1 percent at $82.69 per barrel

Brent North Sea Crude: DOWN 1.0 percent at $88.18 per barrel

New York - DOW: UP 1.2 percent at 52,208.06 (close)

London - FTSE 100: DOWN 0.1 percent at 10,897.27 (close)

G.Frei--VB