South Korean shares soared 16 percent in early trade on Friday off the back of a fresh surge of investment into global semiconductor stocks, the latest swing in a market being tossed back and forth by leveraged bets, while Japanese shares rose over 5 percent.
The benchmark KOSPI jumped 919.07 points, or 16.43 percent, to 6,512.63 by 0115 GMT, rebounding after three consecutive sessions of losses that took the index to its lowest level since April 7.
Samsung Electronics shares rose as much as 26.3 percent and SK Hynix stock gained as much as 29.7 percent, with both chipmakers set to post record daily gains. The two chipmakers account for more than half of the KOSPI by market capitalisation.
The stunning turnaround came after the Philadelphia Semiconductor Index surged 8 percent in the U.S. on Thursday, with chipmaker Micron Technology up 18 percent.
Tech giant Microsoft leapt 15 percent, for its biggest gain in 18 years, after reporting stellar earnings that injected fresh market confidence into the outlook for AI investments.
In broader Asian markets, other tech heavy market gauges also increased sharply. Japan's Nikkei rose more than 5 percent and Taiwanese shares jumped 7 percent.
The Bank of Japan is widely expected to keep monetary policy steady later in the day. The Nikkei ended the morning session up 4.4 percent at 64,572.25 after surging as much as 5.7 percent at one point. The broader Topix rose 1.5 percent.
Chip-testing equipment manufacturer Advantest soared 17 percent and AI-focused startup investor SoftBank Group leapt more than 15 percent.
In South Korea, foreigners were net buyers on Friday of shares worth 5.8 trillion won (US$4.04 billion).
If the current gains stick, the KOSPI will post its biggest daily percentage rise on record. The index, however, remains fragile and down more than 30 percent from a peak late in June.
Earlier this week, South Korea announced new measures to rein in the leveraged products wreaking havoc in the stock market, but analysts said they might not go far enough to quell skyrocketing volatility, as pain and public anger mount over sharp losses this month.
"It is a concern that there is investor sentiment of trying to recover losses from the recent market slump through leveraged bets," said Han Ji-young, an analyst at Kiwoom Securities.
The KOSPI is on track for a monthly fall of nearly 25 percent, its largest since the Asian financial crisis in 1997.
Reuters and staff reporter
