SynopsisSouth Korea's Kospi surged 4% on Thursday, extending gains for a third straight session, as stronger-than-expected economic growth and robust AI spending plans from US tech giants boosted chip stocks. Samsung Electronics and SK Hynix climbed up to 6%, driving the benchmark higher after GDP expanded 0.6% in the April-June quarter, beating forecasts.IANSSouth Korea's Kospi surged 4% on Thursday, extending gains for a third straight session. South Korea’s Kospi jumped 4% on Thursday, rallying for the third consecutive session as the country’s economic growth beat estimates due to a chip export boom and US tech firms outlining significant spending plans.Despite the latest recovery, Kospi, the world's best-performing major equity benchmark of 2026 so far, remains firmly in a bear market after a massive crash following a skyrocketing rally. The country's benchmark index is down more than 24% from its June peak of 9,386. South Korea’s stock market has seen massive upswings and equally sharp downswings this year so far, leading to panic among retail investors. Analysts highlighted how the country's single-stock derivative products tied to chipmakers Samsung Electronics and SK Hynix wiped out major portions of gains recorded by retail investors this year.Today's bout of recovery came as the shares of chipmakers Samsung Electronics and SK Hynix, which make up just over half of the benchmark Kospi, jumped up to 6%.South Korea's growth beats estimatesLatest government data showed that South Korea’s economy, which is Asia's fourth-largest, expanded 0.6% ⁠in the April-June period ‌from a quarter earlier on a seasonally adjusted basis, faster than a median estimate of 0.4% from a Reuters poll. Although this is sharply slower growth when compared to the 1.8% ⁠growth in the first quarter, this suggests that chip-led growth can sustain the economy as policymakers begin this month's tightening cycle.US tech firms up AI spendingKospi’s rise today also comes amid an overall uptrend in Asian markets, with Japan’s Nikkei also in the green despite rising oil prices renewing inflationary concerns. US technology firms outlined significant capital spending plans that are likely to benefit chipmakers in the region. Earnings from Google-parent Alphabet and Elon Musk’s Tesla showed no slowdown in the vast spending on AI infrastructure. The search giant raised its capital expenditure plans for the year and now expects to spend between $195 billion and $205 ⁠billion. "The bigger takeaway is that AI is rapidly moving from infrastructure to disruption, with hyperscalers increasingly using AI to challenge incumbent platforms across search and e-commerce, reinforcing the AI disruption trade," Reuters quoted Gary Tan, portfolio manager at Allspring Global Investments, as saying.Also read | Is Korean stock market turning into open casino? How retail leverage is fueling wild swingsKorean govt attempts to stabilise stock marketKospi’s recovery also comes as the government buckles up measures to provide some stability to the highly volatile stock market. South Korea’s President Lee Jae Myung recently said, “Our domestic stock market is quite unstable.” He noted that since the country’s stock market experienced a historically unprecedented massive surge in such a short period, it would require time and fluctuation to stabilise.Authorities last week moved to cool the speculative fever, announcing a ban on new listings of leveraged exchange-traded funds tied to individual stocks. The abrupt intervention comes just two months after regulators initially approved the vehicles."The KOSPI's correction was mainly led by foreign equity investors' selloff in terms of rebalancing and profit-taking," Reuters quoted Citi analysts as saying in a note. "However, we believe foreign equity investors' selloff is moderating amid emerging signs of buy-on-dip capital flow,” they added.Also read | Warren Buffett admits to a rare mistake with these 2 big tech stock bets(With inputs from agencies)(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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