KOSPI attempts to reclaim 7,000 mark on 'Nvidia effect'

South Korea's KOSPI index experienced a strong opening on August 27, climbing over 2% and approaching the 7,000-point threshold. This surge was primarily attributed to the 'Nvidia effect,' following the U.S. chipmaker's robust earnings forecast, which reinforced confidence in the ongoing artificial intelligence (AI) rally.

Major players in the semiconductor sector, Samsung Electronics and SK Hynix, spearheaded the market's advance. Samsung Electronics saw its stock price rise by 3.25% to 270,000 won, while SK Hynix jumped 4.80% to 1,769,000 won. Foreign investors were active net buyers, injecting approximately 150 billion won into the market in early trading.

Initially, market participants showed caution ahead of Nvidia's earnings announcement, leading to a temporary downturn in semiconductor stocks. However, Nvidia's report, released early on August 27, helped alleviate concerns about the sustainability of the AI boom. The company reported a 106% year-on-year increase in second-quarter revenue, reaching $96.22 billion (approximately 133.2 trillion won).

While Nvidia initially saw its stock price dip in after-hours trading due to a slightly lower projected gross profit margin for the third quarter compared to the second, the stock rebounded sharply. This turnaround was driven by CEO Jensen Huang's projection of a 70% revenue increase for the upcoming year, significantly surpassing the market's expectation of 44%. Nvidia's stock subsequently surged by 4.71% in late after-hours trading.

"There is nothing like strong growth expectations to drive stock prices," commented Huh Jae-hwan, an analyst at Eugene Investment & Securities, on the impact of Nvidia's outlook. Meanwhile, the KOSDAQ index also showed positive movement, rising 0.55% to 831.40 points around the same time.

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There is nothing like strong growth expectations to drive stock prices.