South Korean Stocks Rebound as KOSPI Gains 3.3 Percent

South Korean stocks surged on Wednesday, Oct. 21, as technology shares recovered following a rally on Wall Street, reversing a sharp sell-off triggered by concerns about artificial intelligence profitability and financing. The KOSPI rose 3.3% to 5,735.66, while investors assessed corporate earnings, semiconductor demand and economic developments across Asia.

The rebound followed Tuesday's 2.5% decline in the South Korean benchmark, when SK Hynix shares fell 3.5% and Samsung Electronics dropped 1.8%. The losses reflected broader uncertainty over whether AI-related investments can generate sufficient returns amid elevated borrowing costs.

South Korean AI infrastructure company Elice also recovered after its difficult market debut. Its shares, which fell as much as 33% on Tuesday after opening below their initial public offering price, reached the exchange's upward trading limit of 29.9% on Wednesday.

Japan's Nikkei 225 gained 0.9% to 64,621.24 on Wednesday, supported by export data showing a 16.7% year-over-year increase in September. Stronger sales of automobiles and computer-related components contributed to the growth, according to the report published by Click2Houston.

Japanese imports rose 18.9% during the same period, largely because of higher oil prices associated with the war with Iran. The increase nearly doubled the country's trade deficit compared with September of the previous year.

Oxford Economics cautioned that the export outlook remained uneven, with AI-related demand providing support while other industries faced mounting pressures.

"Robust AI demand should continue to support tech-related goods exports. However, non-AI capital goods and auto are likely to weaken amid high energy prices and borrowing costs, weighing on overall exports," Oxford Economics said in a report.

Other Asian markets delivered mixed results on Wednesday. Hong Kong's Hang Seng Index fell 0.7% to 23,707.11, while the Shanghai Composite declined 0.6% to 3,713.36. Taiwan's Taiex rose 1.3%, and Australia's S&P/ASX 200 advanced 0.2% to 8,831.30.

The regional recovery followed a mixed session on Wall Street on Tuesday, when most U.S. stocks advanced on stronger corporate earnings. The S&P 500 gained 0.3%, and the Dow Jones Industrial Average rose 1%, while the Nasdaq Composite slipped less than 0.1% as AI-related shares continued to fluctuate.

Equifax shares jumped 11.3% after the company reported summer-quarter profits above analysts' expectations, despite the effects of high mortgage rates on parts of its business. Hasbro gained 11.2% after reporting that its Magic: The Gathering game generated more than $600 million in revenue in a single quarter for the first time.

Shares of 3M rose 5.8% following a stronger-than-expected profit report. General Motors, however, fell 6.8% despite exceeding profit expectations, as its midpoint forecast for full-year 2026 earnings fell short of analysts' estimates.

Concerns about the sustainability of AI investment have continued to unsettle global markets. Higher interest rates in bond markets could make borrowing more expensive for companies purchasing AI chips, adding pressure to technology shares after the U.S. stock market recorded its worst weekly performance since June.

Energy prices remained another concern for investors. Brent crude rose to nearly $112 per barrel on Tuesday before retreating, then climbed 1.5% to $110.40 in early Wednesday trading. U.S. benchmark crude gained 1.4% to $99.24 per barrel, while Brent prices continued to fluctuate between $97 and $112 during October amid uncertainty surrounding energy market conditions.

Earlier in the week, Asian markets had also absorbed China's decision to leave its benchmark lending rates unchanged. The People's Bank of China maintained its one-year loan prime rate at 3.00% and five-year rate at 3.50% for a 17th consecutive month on Tuesday, following stronger-than-expected third-quarter economic growth.

The policy decision provided no additional rate relief for borrowers as Chinese authorities considered replacing the seven-day reverse repo rate with the overnight rate as the main monetary policy benchmark. Meanwhile, South Korea's sharp market reversal highlighted how quickly investor sentiment toward AI-related companies can change as earnings expectations and financing costs shape trading across Asia.