Chipmakers led a rebound in South Korean equities as expectations that military conflict with Iran may be nearing an end boosted market risk appetite. The Korea Composite Stock Price Index closed up 8.4% on Wednesday, with Samsung Electronics surging 13%, its largest single-day gain since December 2001. SK Hynix rose nearly 11%. The small-cap Kosdaq index jumped more than 6%, at one point triggering an exchange-imposed halt on program trading. This rally followed four consecutive days of declines that had pushed the index close to bear market territory. Global markets breathed a sigh of relief as both the U.S. and Iran appeared willing to de-escalate weeks of military tensions. Commenting on the South Korean market, Cameron Chui, equity strategist at J.P. Morgan Private Bank, said, "The prospect of a near-term resolution to the Iran conflict, along with artificial intelligence-related demand likely remaining intact, is encouraging. Over the past two to three weeks, investors had reduced exposure and are now rebuilding positions in sectors with strong earnings growth and attractive valuations." Additional positive factors supported the market: data showing rising memory product prices in March reinforced views that the AI boom remains on track. News on Tuesday that Nvidia plans to invest $2 billion in Marvell Technology, coupled with OpenAI completing its largest funding round to date, also lifted U.S. tech shares. Ha Seok Keun, chief investment officer at Eugene Asset Management, noted that South Korean stocks are experiencing a technical rebound from short-term oversold conditions. The Iran conflict has caused sharp swings in the South Korean market: in February, it was among the world's top performers, but by March it had become one of the worst. Tech stocks were hit by stagflation fears linked to the conflict, while memory chip makers faced additional pressure from concerns that compression technology introduced by Google could reduce demand for memory chips. Market volatility remains high, with prices swinging widely on daily news updates. Uncertainty persists as President Donald Trump is scheduled to deliver a national address on the Iran situation at 9 p.m. Washington time Wednesday. Domestic institutional investors were net buyers of KOSPI components, while foreign investors and retail traders were net sellers. Jung In Yun, CEO of Fibonacci Global Asset Management, remarked, "For investors who still believe regional tensions are not fully resolved, now is a good time to take profits. Numerous unexpected factors could emerge throughout the year, and energy prices are likely to stay elevated."
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