South Korean construction stocks rise on hopes of data center investment

South Korean construction stocks rose sharply as investors saw a possible benefit from changes to US data center development.

The KRX Construction Index gained 7.13%, with Hyundai Engineering & Construction and DL E&C among the companies that rose.

US election results raised concerns about new data center restrictions in states where many facilities are being built.

Some winning Democratic candidates have proposed pausing new projects until laws are passed and have raised concerns about power costs and tax benefits.

Analysts say strong AI demand could move investment abroad if US projects become harder to build.

They see South Korea as a possible destination because it has industrial land, power capacity and capital, as well as policies intended to attract data centers.

A Korean support law is due to take effect in 2028, with measures including faster permitting and infrastructure support for some projects outside the capital region.

South Korean projects are advancing, but overseas investment is only a possibility; the government says it is monitoring developments, while a 100-megawatt data center project in Donghae is expected to hold a groundbreaking ceremony soon.