Foreign Investors Rebound in South Korean Markets

Foreign investors are pouring back into South Korea's capital markets in April, reversing a record selloff from the previous month, as optimism around artificial intelligence hardware and an upcoming inclusion in a global bond index bolsters both stocks and debt.

Data from LSEG shows foreign inflows into South Korean equities reached $4.2 billion this month, following outflows of $23.8 billion in March, the largest since 2011. The benchmark KOSPI index has recovered nearly all of its 19 percent drop from March, erasing much of the damage from heightened geopolitical tensions in the Middle East that drove investors toward safer U.S. assets. Year to date, the KOSPI is up 44.5 percent, continuing a strong performance after a 75 percent gain in 2024.

The rebound in equities centers on renewed enthusiasm for AI-related sectors, particularly memory chips used in data centers. South Korea's position as a key supplier of high-bandwidth memory has attracted buyers seeking exposure to the technology boom. Samsung Electronics, a leading producer, has spearheaded the recovery, drawing investments from funds shifting away from pricier Taiwanese semiconductor stocks. Isaac Thong, senior...