South Korean stocks struggled to turn Micron Technology’s record earnings into a lasting rally on Thursday, leaving the KOSPI near flat even as Japan’s Nikkei 225 surged on renewed enthusiasm for semiconductor shares.
The KOSPI recovered from an early 0.34% decline to trade around 6,805 by late morning, while Samsung Electronics and SK Hynix erased opening losses.
The hesitation came despite Micron posting $54.23 billion in quarterly revenue and guiding to $61.5 billion for the current quarter, both above expectations. Elevated US Treasury yields, foreign selling and still-high oil prices kept Seoul investors cautious.
Micron validates the memory boom but KOSPI hesitates
Micron’s results strengthened the case that AI-driven memory demand remains exceptionally strong.
Fiscal fourth-quarter revenue reached a record $54.23 billion, compared with $11.32 billion a year earlier, while adjusted earnings per share came in at $33.42.
The company also said long-term customer agreements had risen to $32 billion from $22 billion in June and that most of its fiscal 2027 output was already covered.
Management expects supply-demand conditions to tighten further in fiscal 2027 and 2028.
That should be supportive for Samsung and SK Hynix, which alongside Micron dominate the global memory market. Yet both opened lower before recovering, underlining how much optimism investors had already priced in.
D.A. Davidson managing director Gil Luria told MarketWatch ahead of the results that investors may still be treating memory companies too much like traditional commodity producers, even as customised high-bandwidth memory becomes increasingly important to AI systems.
Five percent yields overpower the earnings catalyst
The larger problem for the KOSPI is the cost of capital. The US 10-year Treasury yield climbed above 5.30% on Wednesday, while the 30-year yield moved above 5.6%, keeping pressure on richly valued technology shares.
Kiwoom Securities analyst Han Ji-young told Seoul Economic Daily that earnings growth now needs to become strong enough to withstand a market in which high rates are increasingly the base case.
He added that the speed of the rise in yields matters more than the absolute level.
Softer US inflation offered only partial relief. August PCE inflation rose 0.3% on the month, less than economists expected, while traders cut the probability of an October Fed increase to around 38% from about 50% a day earlier.
New York Fed President John Williams also said this week that there was no urgency for another immediate increase.
Nikkei rallies while Korea waits for foreign buyers
Japan provided the sharpest regional contrast. The Nikkei 225 gained more than 2% as Advantest, Tokyo Electron and other AI-linked shares rallied, while the broader Topix lagged.
The Bank of Japan’s September meeting summary nevertheless showed some policymakers saw scope to raise rates faster if inflation risks intensified.
Elsewhere, MSCI’s Asia-Pacific index outside Japan slipped about 0.2%. S&P 500 and Nasdaq futures rose around 0.3%, while European stock futures traded lower.
Oil remained another constraint. Brent traded near $98 a barrel as investors weighed recovering Middle East exports against continuing uncertainty around US-Iran negotiations.
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