Hong Kong (AFP) - South Korean stocks soared a record 17.9 percent on Friday as Asian tech firms performed a blistering recovery from an extended sell-off, with beaten-down chip giant SK hynix rocketing almost a third as the AI boom roared back.

After four weeks of blood-letting fuelled by worries over the vast sums being invested in artificial intelligence, traders raced to pick up bargains following a series of strong earnings.

Seoul’s Kospi had been at the forefront of the sell-off after hitting a record high a month ago, with chipmakers SK hynix and Samsung the poster children of the rout, losing around half their value in the panic.

However, the voracious buying sentiment that had characterised markets for much of the past two years returned on Friday.

US giants Microsoft and Amazon unveiled healthy earnings this week that saw their shares storm higher on Wall Street, helping the Nasdaq pile on almost three percent.

Analysts have noted that heavy selling in recent weeks was focused on concerns about when the huge sums invested in AI would see returns, rather than fundamental problems in the sector.

The Kospi’s eye-watering rally was helped by news South Korea’s government planned to pump almost $14 billion into its sovereign wealth fund for AI investments and data centres.

Officials had earlier pledged to introduce measures to curb retail traders’ access to leveraged exchange-traded funds (ETFs), including limits on individuals’ investment in them, which had been partly blamed for the recent panic-selling.

SK hynix surged 30 percent – wiping out its losses from the previous two days.

It was helped by confirmation that Chey Tae-won, chair of parent company SK Group, had bought around $3 million worth of shares, his first purchases in a personal capacity, seen as a vote of confidence in the company.

- Crude prices drop -

Chey had dismissed the swings as a market adjustment earlier this month, saying investors should take a long-term view, adding that “memory chips will always be needed, so their value will eventually rise over time”.

Samsung Electronics spiked almost 27 percent.

Ryu Hyung-keun, of Daishin Securities, told AFP investors had become “increasingly sceptical about how much further memory chip prices could rise”.

But Chey’s purchase of company shares had been interpreted by investors as “a positive signal”, he said.

The buying spree was mirrored in Tokyo’s four percent rally, with tech giant Advantest piling on 16 percent, chipmaker Kioxia 18 percent and tech investment titan SoftBank 14 percent.

Taipei jumped eight percent thanks to a 10 percent jump in chipmaker TSMC.

Hong Kong, Shanghai, Sydney, Mumbai, Bangkok and Jakarta were also up, while London, Paris and Frankfurt advanced at the open.

The yen held its gains against the dollar a day after rallying amid speculation that Japanese authorities intervened to prop up the currency, which had been sitting around 40-year lows.

Oil prices extended Thursday’s retreat amid easing Middle East tensions.

The drop came after Hamas said it had agreed to a deal announced by US President Donald Trump to end the war with Israel that includes it handing over its weapons to a Palestinian governing committee and the gradual withdrawal of Israeli forces from Gaza.

- Key figures around 0810 GMT -

Seoul - Kospi: UP 17.9 percent at 6,595.45 (close)

Tokyo - Nikkei 225: UP 4.0 percent at 64,362.02 (close)

Hong Kong - Hang Seng Index: UP 0.1 percent at 25,884.43 (close)

Shanghai - Composite: UP 0.7 percent at 3,832.26 (close)

London - FTSE 100: UP 0.8 percent at 10,978.63

Dollar/yen: DOWN at 160.30 yen from 162.61 yen on Thursday

Euro/dollar: DOWN at $1.1518 from $1.1529

Pound/dollar: DOWN at $1.3452 from $1.3468

Euro/pound: UP at 85.63 pence at 85.60 pence

West Texas Intermediate: DOWN 1.2 percent at $82.61 per barrel

Brent North Sea Crude: DOWN 0.9 percent at $88.24 per barrel

New York - DOW: UP 1.2 percent at 52,208.06 (close)