SynopsisSouth Korea’s KOSPI surged as much as 6% to an intraday high of 8,982, extending gains for a second straight session and recovering sharply from earlier losses. Trading was briefly halted after a 5% jump triggered a sidecar mechanism. The rally follows a steep 10% drop earlier in the week driven by a selloff in domestic chip stocks.APSouth Korea’s benchmark index soared as much as 6% to an intraday high of 8,982 on Thursday, extending gains for a second straight session and taking its two-day rally to nearly 10%.The sharp rally forced the Korea Exchange to briefly halt trading shortly after the open after the Kospi surged more than 5%. The bourse operator activated a buy-side sidecar, suspending program trading in Kospi-listed shares for five minutes as markets opened.Thursday’s advance helped the Kospi recover a significant portion of losses suffered earlier in the week. The benchmark had tumbled around 10% on Tuesday amid a steep selloff in domestic chip stocks.SK Hynix fuels reboundAmong the biggest gainers was SK Hynix, up over 10%, after the memory chipmaker unveiled plans on Wednesday to raise $29.4 billion through a US stock market listing, as the Nvidia supplier looks to further capitalise on strong investor appetite for AI-linked stocks.The company is seeking 45.45 trillion won through the US listing after its Seoul-traded shares surged more than 800% over the past 12 months, pushing its market value above $1 trillion. SK Hynix expects its American depositary receipts to begin trading on July 10 and plans to use the proceeds to expand production capacity and purchase extreme ultraviolet lithography machines.Samsung Electronics also rallied over 5% after US memory-chip rival Micron Technology posted a quarterly sales forecast that comfortably exceeded Wall Street expectations. Gains in the two semiconductor heavyweights helped propel the Kospi index higher by 6%. Much of the benchmark’s meteoric rise this year has been driven by Samsung Electronics and SK Hynix, which together account for more than half of the Kospi.Market concentration has become increasingly pronounced. The top 10 stocks now represent roughly 65% of the index, while electronics alone account for 60.2% of the MSCI Emerging Markets Index.Micron earnings boost sentimentInvestor sentiment received another lift from Micron’s stellar earnings report, which underscored the powerful impact of the artificial intelligence boom on the semiconductor industry.The company comfortably beat Wall Street expectations and issued a stronger-than-expected outlook, sending its shares sharply higher in extended trading. The results reinforced the growing importance of memory technology in the AI ecosystem, according to a CNBC report.Micron reported quarterly revenue of $41.46 billion, significantly above analysts’ expectations of $35.84 billion. Adjusted earnings per share came in at $25.11, ahead of consensus estimates of $20.78. The stock climbed 13% in after-hours trading to hit a fresh high.Tech worries linger?The selloff earlier this week reverberated across global markets, dragging down US semiconductor stocks as investors questioned elevated valuations in AI-related trades and rotated toward more defensive sectors.The latest volatility in the KOSPI highlights the risks facing what has been the world’s best-performing major equity market this year. Leveraged exchange-traded funds linked to chip giants have amplified market swings, prompting South Korea’s top financial regulator to express regret over allowing such high-risk products.Authorities are now considering stabilisation measures to limit potential fallout from sharp ETF moves tied to Samsung Electronics and SK Hynix, Financial Supervisory Service Governor Lee Chan-jin said during a briefing on Monday.Adding to investor concerns are expectations of a faster rate-hike cycle under a more hawkish US Federal Reserve led by newly appointed Chair Kevin Warsh. Fed funds futures currently imply a 75% probability of a rate increase by September, while BofA Global Research and Deutsche Bank have both abandoned earlier forecasts for unchanged policy and now expect a hike before year-end amid continued economic resilience.South Korea has been one of the world’s standout equity markets this year, driven by a powerful rally in semiconductor and AI-related stocks. However, that strong run-up has also left the market increasingly vulnerable to sharp corrections and bouts of volatility.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)Read More News on(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. 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