South Korea's Kospi index surged as much as 4.7% on Wednesday, extending its gains for a second consecutive session, driven by a rally in chip stocks. The uptick was fueled by a sharp rise in US semiconductor stocks overnight and a decline in oil prices, which improved overall market sentiment.

A favorable macro backdrop, including lower oil prices, declining interest rates, and strength in the US semiconductor sector, is expected to support broad-based gains across major sectors of the Kospi, potentially ushering in a recovery phase, according to Shawn Oh, head of Korean cash equities at NH Investment & Securities.

The Philadelphia Semiconductor Index closed 6.6% higher on Tuesday, with major contributions from Broadcom and Micron Technology. Market sentiment was further bolstered by a report indicating that all memory chip production capacity for 2027 has already been sold, underscoring robust demand.