Kospi surges 18% as tech rebound lifts markets

South Korea's Kospi closed up 17.9% on Friday as technology shares rebounded and global stock markets rallied after weeks of selling linked to concern over artificial intelligence investment.

The Seoul index ended at 6,595.45. Tokyo's Nikkei 225 closed up 4.0% at 64,362.02, while Wall Street was also higher around 1330 GMT, with the Nasdaq Composite up 0.9%, the S&P 500 up 0.5% and the Dow Jones Industrial Average up 0.4%.

Technology stocks had been under pressure for several weeks as investors questioned when large AI investments would produce returns. Microsoft reported earnings this week that lifted its shares on Wall Street and helped the Nasdaq gain almost 3% on Thursday.

AJ Bell investment director Russ Mould said Microsoft's results had helped improve broader market sentiment and had allowed investors to set aside concerns about the Iran conflict for now.

South Korean shares were also helped by news that the government planned to put almost $14 billion into its sovereign wealth fund for AI investments and data centres. SK hynix rose 30%, erasing its losses from the previous two days, after confirmation that SK Group chair Chey Tae-won had bought about $3 million of shares.

Apple shares fell 9.4% even though sales rose 16% to $109.4 billion in the April-to-June period and profit rose 27% to $29.8 billion. The company forecast revenue growth of 9% to 11% in the current quarter and cited supply constraints.

Briefing.com analyst Patrick O'Hare said the impact of Apple's warning had been limited because the market viewed the company's issues as linked more to supply than demand.

Amazon shares rose nearly 13% after reporting growth in overall revenue and sales, including in its cloud, artificial intelligence and chips divisions. The company said two AI-related divisions grew by triple-digit percentages and that its AI cloud and chips businesses each exceeded $25 billion in annual revenue run rates.

In Europe, London's FTSE 100 hit another record high and came close to 11,000 points before giving up those gains. It was flat at 10,899.79 around 1330 GMT. Paris's CAC 40 was up 0.6%, while Frankfurt's DAX was up less than 0.1%.

The yen held gains against the dollar after Thursday's rally amid speculation that Japanese authorities had intervened to support the currency.