On Wednesday, South Korean stocks rebounded, driven by a surge in semiconductor shares, as growing expectations that the Iran conflict may be nearing an end boosted investor risk appetite.
The Kospi index climbed as much as 6.8%, with Samsung Electronics and SK Hynix both rising more than 10% and 9%, respectively. The sharp rally in index futures briefly triggered an exchange suspension of program trading.
The gains came after four consecutive days of declines had pushed the index close to bear market territory. Global market sentiment improved after former U.S. President Donald Trump indicated he expected the war with Iran to conclude within two to three weeks. The White House announced that Trump would deliver an address updating the public on the Iran situation at 9 p.m. Washington time on Wednesday.
Ha Seok-keun, Chief Investment Officer at Eugene Asset Management, noted that the rise in South Korean equities was fueled by "a shift in global risk sentiment driven by a rebound in U.S. stocks, with tech shares leading gains in the Korean market." He added that a technical rebound from short-term oversold conditions also played a role, triggering short covering and bargain hunting.
The Iran conflict has caused significant volatility in South Korean stocks. While the market was among the world's top performers in February, it became one of the worst-performing in March.
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