South Korea’s Kospi experienced a notable increase of up to 12% on Thursday, marking a significant recovery from its previous worst session and poised to achieve its most favorable performance of the day, according to data. The index subsequently moderated its gains, increasing by 9.6% to 5,583.9, as major players SK Hynix and Samsung Electronics experienced significant surges of over 10% and 11%, respectively. The small-cap Kosdaq experienced an increase of 14.1%, closing at 1,116.41. On Thursday, the Korea Exchange temporarily suspended trading on both the benchmark KOSPI index and the Kosdaq following a significant rally. The Kospi index experienced a significant drop of 12% on Wednesday, marking its most severe single-day decline. The recovery in South Korea’s stock market was primarily fueled by a reversal of leveraged selling, according to Daniel Yoo. “It has nothing to do with fundamentals,” he stated.

A series of margin calls among retail investors initiated significant selling pressure earlier in the week; however, following the unwinding of those positions, the market commenced its recovery, he stated. Year-to-date performance of South Korean shares “The sell-off [on Wednesday] was mainly driven by the upside risk around oil prices stemming from the evolving geopolitical developments,” stated Raisah Rasid. “Given South Korea’s status as a significant importer of crude oil, the uncertainty regarding potential increases in oil prices may exert pressure on the current account balance and contribute to inflationary trends,” she stated. With the stabilization of oil prices, there was an observable improvement in risk sentiment, leading to a rebound in Korean equities, according to market observers. U.S. Treasury Secretary Scott Bessent stated on Wednesday that Washington will implement a series of measures designed to stabilize oil shipments through the Persian Gulf, indicating that the government is ready to intervene as geopolitical tensions jeopardize one of the world’s most vital energy corridors. Furthermore, the interplay of demand and supply in the memory chips sector is expected to remain constrained throughout this year and potentially into the next, as noted by JPMorgan’s Rasid, who also emphasized that the long-term structural factors supporting Korean equities continue to be robust. According to Morningstar data, memory giants Samsung and SK Hynix account for nearly 50% of the index.

In a similar vein, Kieron Poon, investment director of Asian equities at Aberdeen Investments, noted that the sell-off on Wednesday was further exacerbated by the Korean market adjusting following a public holiday on Monday. Consequently, Tuesday’s decline mirrored a buildup of risk-off sentiment and associated losses. Other Asia-Pacific markets experienced a notable increase on Thursday, recovering from a series of significant declines as investor sentiment improved in the wake of overnight gains on US Market and diminishing worries regarding rising oil prices. Australia’s S&P/ASX 200 increased by 0.44%, concluding the trading day at 8,940.3. Japan’s Nikkei 225 experienced an increase of 1.9%, concluding the trading session at 55,278.06. The Hong Kong Hang Seng index increased by 0.35%, while the CSI 300 experienced a rise of 0.98% to 4,647.69. This movement follows China’s announcement on Thursday of its GDP growth target for 2026, set at 4.5% to 5%, marking the lowest target on record since the early 1990s. This decision comes as Beijing contends with ongoing deflationary pressures and trade tensions with the United States. That The target signifies a reduction from the previously established “around 5%” benchmark maintained over the last three years, representing the most conservative objective to date for the world’s second-largest economy, excluding 2020 when Beijing refrained from setting a growth target in light of the pandemic.

Beijing has maintained its budget deficit target at “around 4%” of GDP, consistent with last year, coinciding with the annual meeting of the National People’s Congress, the nation’s premier legislative assembly, this week. “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,” noted Poon from Aberdeen. Overnight in the U.S., stocks experienced an uptick, continuing the positive momentum observed late in the prior session, as the spike in oil prices moderated following recent developments in the U.S.-Israeli conflict regarding Iran, while concerns over a potential slowdown in U.S. economic growth diminished. The Dow Jones Industrial Average increased by 238.14 points, representing a gain of 0.49%, concluding the session at 48,739.41. The 30-stock index halted its three-day streak of declines. The S&P 500 increased by 0.78%, concluding at 6,869.50, whereas the Nasdaq Composite rose by 1.29%, finishing at 22,807.48. Technology stocks bolstered the overall market, especially those within the semiconductor sector. Micron Technology and Advanced Micro Devices each experienced an increase exceeding 5%. Broadcom and Nvidia experienced an increase of over 1% each.