South Korean shares surged 4.6 percent to a more than five-week high on Monday, driven by demand for artificial intelligence-related stocks following the launch of OpenAI's new-generation model. The Korean won strengthened against the US dollar.

The benchmark Korea Composite Stock Price Index (Kospi) closed up 308.18 points, or 4.61 percent, at 6,995.39, extending its winning streak to three sessions. It was the index's highest close since July 23, when the Kospi finished at 7,096.89.

Trading volume was light at 237.9 million shares worth 21.5 trillion won ($16 billion), with gainers outnumbering decliners 476 to 380.

The rally was supported by foreign and institutional investors, who purchased a net 2.55 trillion won and 2.64 trillion won, respectively. Individual investors, by contrast, sold off a net 6.83 trillion won.

The index opened 3.34 percent higher, as sentiment was lifted by the launch of OpenAI's new GPT-6 Astra, which is expected to increase demand for memory chips. The gains came even though all three major US stock indexes closed lower on Friday, while the PHLX semiconductor index rose 3.38 percent.

The sensitivity of the Kospi to AI model news reflects South Korea's outsized role in the global memory chip industry: Samsung Electronics and SK hynix are the world's two largest memory chipmakers, and both supply high-bandwidth memory used in AI data centers, making Korean equities a frequent beneficiary of shifts in AI demand expectations.

"Despite sluggish major tech and software shares on Wall Street, investor sentiment was stoked by OpenAI's new Astra, which could open up the artificial general intelligence era," said Kang Jin-hyuk, a senior analyst at Shinhan Securities.

Semiconductor shares were among the biggest winners. Industry leader Samsung Electronics jumped 5.68 percent to 270,000 won, while rival SK hynix soared 8.26 percent to 1.78 million won. Hanmi Semiconductor, a leading chip equipment maker, rose 4.57 percent to 240,500 won, and SK Square, the parent of SK hynix, vaulted 8.07 percent to 1.13 million won.

Auto stocks also advanced, with top carmaker Hyundai Motor adding 2.48 percent to 393,000 won and its auto parts affiliate Hyundai Mobis climbing 2.37 percent to 432,000 won.

Bank shares were bullish as well: Hana Financial Group advanced 3.43 percent to 138,900 won, and Shinhan Financial Group gained 3.26 percent to 113,900 won.

Defense companies closed mixed, with LIG D&A rising 1.07 percent to 659,000 won, while Hanwha Aerospace fell 1.52 percent to 1.04 million won.

In currency markets, the Korean won was quoted at 1,340.5 to the US dollar as of 3:30 p.m., up 9.9 won from the previous stock trading session. A firmer won often accompanies equity inflows from foreign investors, as seen in Monday's net foreign buying. (Yonhap)