South Korea GDP expands above estimates in Q2, lifted by semiconductor boom; KOSPI index rallies 3%

South Korea's GDP grew 0.6% quarter-on-quarter in Q2 2026, beating the 0.4% forecast, and 3.7% year-on-year versus expectations of 3.5%, driven by robust semiconductor exports that offset weak construction. The KOSPI index rallied 3.04% to 7,004.24, with Samsung Electronics up as much as 4.8% and SK Hynix gaining up to 6.5%, as the AI capex theme lifted Asian tech stocks broadly. The Bank of Korea is expected to deliver at least one more rate hike to 3.00%, while oil prices climbed above US$96 a barrel after Houthi attacks on Saudi tankers in the Red Sea and escalating US-Iran tensions.