Goldman Sachs Sees 20% Rally Ahead for South Korea Despite Monday’s Tech Selloff

Key Takeaways

• Asian technology stocks declined Monday following profit-taking in semiconductor companies after recent rally
• South Korea’s KOSPI index fell 0.5%, led by SK Hynix down over 4% and Samsung Electronics declining
• SK Hynix plans to debut $29 billion worth of American depositary receipts on Nasdaq
• Goldman Sachs remains optimistic on South Korean equities, projecting more than 20% gains for KOSPI over 12 months
• Declining crude oil prices and reduced geopolitical risks boosted markets in Hong Kong, Indonesia, and India

Asian equity markets with significant technology exposure experienced a pullback Monday as traders locked in gains from semiconductor stocks following last week’s strong performance. The decline was particularly pronounced in South Korea and Japan, both heavily weighted toward chip manufacturers.

South Korea’s KOSPI benchmark reversed early gains to finish 0.5% lower. Japan’s Nikkei 225 similarly retreated. Mainland China’s CSI 300 declined 0.6%, while Taiwan’s benchmark remained relatively flat.

Semiconductor Sector Drives Losses

SK Hynix tumbled more than 4% during Seoul trading, while Samsung Electronics declined approximately 1.5%. Battery manufacturer LG Energy Solution lost nearly 4%. In Taipei, MediaTek retreated 1.4%.

Foreign investors sold a net 828.8 billion won of Korean equities throughout the session. The won depreciated 0.3% versus the U.S. dollar.

Despite Monday’s setback, the KOSPI has surged roughly 86% year-to-date, positioning South Korea as Asia’s top-performing equity market in 2026’s opening half. Artificial intelligence memory chip manufacturers have powered the majority of these advances.

A notable exception was Hon Hai Precision Industry, commonly called Foxconn. Shares climbed 0.6% following the announcement of record June and second-quarter revenues, fueled by robust AI server demand. Taiwan Semiconductor Manufacturing also posted modest gains.

SK Hynix is moving forward with plans to introduce 17.79 million new shares via American depositary receipts on the Nasdaq, representing approximately $29 billion in value. South Korean President Lee Jae Myung has urged government officials to accelerate major semiconductor and AI initiatives unveiled last week.

Bank of America characterized the recent artificial intelligence stock correction as a positioning adjustment rather than a fundamental shift. The bank emphasized that AI infrastructure spending continues unabated despite increasing investor selectivity.

Goldman Sachs Maintains Positive Korean Stock Outlook

Goldman Sachs continues to project over 20% appreciation potential for the KOSPI during the coming 12 months, setting a price target of 12,000. The investment bank anticipates the rally will expand beyond AI chip manufacturers into energy, materials, and industrial sectors.

Goldman noted that international capital flows are already shifting toward alternative AI-linked industries and industrials. The firm also highlighted that retail investors maintain moderate exposure levels, with Korean households predominantly allocated to real estate and international equities rather than domestic shares.

The bank projects earnings expansion of 320% in 2026, with an additional 35% growth anticipated in 2027.

Mixed Performance Across Asian Markets

Beyond the chip sector, regional markets showed greater resilience. Hong Kong’s Hang Seng advanced 0.9%. Indonesian stocks gained 0.8% and India’s Nifty 50 climbed 0.7%.

Declining petroleum prices provided additional support. OPEC+ approved another output increase for August, maintaining elevated supply forecasts and alleviating inflation worries.

Market participants now await Federal Reserve meeting minutes scheduled for Wednesday release, alongside inflation reports from China, Taiwan, Thailand, and the Philippines. Taiwan’s June trade statistics will be scrutinized for evidence that AI demand continues supporting export activity.

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