Data from LSEG reported that South Korea’s Kospi increased by up to 12 percent on Thursday, signifying a strong rebound from its worst session, and was heading towards recording its best day. The index later scaled back part of the gains, trading close to 10 percent higher.
Index heavyweights SK Hynix and Samsung Electronics soared more than 15 percent and 14 percent, respectively. The South Korean won also improved by 0.14 percent and was last trading at 1,460.60 against the dollar.
The Kosdaq small-cap index rose by over 11 percent. The Korea Exchange also briefly stopped trading on both the benchmark KOSPI index and the Kosdaq on Thursday, following the sudden surge. The Kospi index had declined 12 percent on Wednesday, its worst single-day decline.
Daniel Yoo, global market strategist at Yuanta Securities, stated that the rebound in South Korea’s stock market mainly driven by a reversal of leveraged selling. He said, “It has nothing to do with fundamentals.”
He added that a wave of margin calls by retail investors had caused heavy selling earlier in the week, but after the positions were unwound, the market started recovering.
Raisah Rasid, global market strategist at J.P. Morgan Asset Management, said, “The sell-off [on Wednesday] was mainly driven by the upside risk around oil prices stemming from the evolving geopolitical developments.”
She added, “As South Korea is a major crude oil importer, uncertainty around how far oil prices could rise may weigh on the current account balance and add to inflationary pressures.”
The market watchers reported that with oil prices starting to stabilize, the risk sentiment improved and Korean equities bounced.
U.S. Treasury Secretary Scott Besset commented on Wednesday that Washington would implement a set of initiatives that would stabilize oil shipments via the Persian Gulf, indicating that the government is ready to intervene as geopolitical strains jeopardize one of the most important energy channels in the world.
Further in the memory chips space, the demand-supply forces are also expected to be tight this year and perhaps next, said JPMorgan’s Rasid, citing that the long-term structural drivers for Korean equities remain intact. The Morningstar data revealed that memory leaders Samsung and SK Hynix make nearly 50 percent of the index.
On the same note, Aberdeen Investments’ Kieron Poon, investment director of Asian equities, added that the sell-off on Wednesday was exacerbated by the fact that the Korean market had been closed during a public holiday on Monday, and the drop on Tuesday was a combination of accumulated risk-off sentiment and losses.
Other markets in the Asia-Pacific markets also shot up on Thursday, recovering after several days of crippling losses as sentiment turned after Wall Street gains over the night and the worry about soaring oil prices.
Australia’s S&P/ASX 200 traded 0.1 percent higher. Japan’s Nikkei 225 surged 2.7 percent, after dropping 3 percent in the previous session. The Hong Kong Hang Seng index is rising by over 1 percent, whereas the CSI 300 is increasing by 0.86 percent. Taiwan’s benchmark index, Taiex, climbed more than 4 percent.
Aberdeen’s Poon indicated, “Global markets are likely to remain volatile over the near term, and there is still scope for further downside if global risk aversion persists as the Iran war drags on.”
However, China’s big policy meeting, dubbed the “Two Sessions,” kicked off on Wednesday. According to a copy of the government work report seen by CNBC, as Beijing grapples with persistent deflationary pressures and trade tensions with the U.S., China on Thursday announced its GDP growth target for 2026 at 4.5 percent to 5 percent, the lowest target since the 1990s.
That target indicates a downgrade from the “around 5%” set in the past three years and the most modest goal so far for the world’s second-largest economy, barring 2020 when Beijing did not set a growth target due to the pandemic.
Beijing maintained its target budget deficit of about 4 percent of GDP as well since the National People’s Congress, the highest legislative arm of the Chinese government, is conducting its annual meeting this week.
In the U.S., stocks gained momentum overnight, following the gains seen in the late part of the last session, as the oil prices surge retreated after events in the U.S.-Israeli war against Iran and the U.S. economic growth scare melted away.
The Dow Jones Industrial Average gained 238.14 points, or 0.49 percent, to close at 48,739.41. The index on 30 stocks broke a three-day streak of losses. The S&P 500 added 0.78 percent and ended at 6,869.50, while the Nasdaq Composite moved 1.29 percent higher and settled at 22,807.48.
The shares of technology helped to facilitate the rest of the market, especially the chip market. Micron Technology and Advanced Micro Devices each advanced more than 5 percent. Broadcom and Nvidia improved by over 1 percent each.
