KOSPI Hits 3-Day High as Foreigners Bet AI Fears Are Overblown

South Korea's benchmark stock index, the KOSPI, extended its winning streak to a third consecutive session on Tuesday, fueled by a strong wave of foreign buying as concerns over an artificial intelligence (AI) bubble appeared to ease. The local currency, however, weakened against the U.S. dollar.

The KOSPI closed 9.16 points, or 0.37%, higher at 2,445.42. Trading volume was moderate at 5.2 trillion won.

Foreign Capital Returns, Targeting Tech

The rally was largely driven by offshore investors, who net-purchased 345 billion won worth of local shares. In stark contrast, retail investors were net sellers, offloading 212 billion won. The positive sentiment was supported by an overnight bull run on Wall Street, where the S&P 500 and tech-heavy Nasdaq both closed higher, stoking hopes for a year-end Santa Claus rally.

"The KOSPI gained ground as foreign capital flowed back into the market amid eased woes over AI valuations," said Lee Jeong-bin, an analyst at Shinhan Securities. Lee noted that foreign investors were particularly focused on scooping up semiconductor shares.

Shipbuilders Spike on Trump's Naval Plan

Leading the charge were chipmakers. Tech giant Samsung Electronics climbed 0.37%, and its rival SK Hynix added 1.85%.

The day's biggest movers, however, were shipbuilders. HD Hyundai Heavy Industries shares spiked an incredible 14.5% following reports that U.S. President Trump had unveiled a plan to build a new naval warship in cooperation with South Korea. The news created a ripple effect, lifting rivals HD Korea Shipbuilding by 10.49% and Hanwha Ocean by 9.79%.

In contrast, battery maker LG Energy Solution dipped 0.39%, and automaker Hyundai Motor lost 0.69%.