Stocks in Korea after record collapse make highest jump since 2008

South Korean stocks rebounded on the morning of March 5 from a record drop a day earlier. Investors returned to the stock market in Seoul, hit by panic selling this week, to buy up the cheapened securities of technology giants.

On March 5, Korea's benchmark Kospi stock index made its strongest intraday jump since October 2008, up 12%, after plummeting the same amount on March 4. Shares of Samsung Electronics and SK Hynix, heavyweights in the semiconductor sector that have been leading the South Korean stock market's global growth since the beginning of 2025, soared more than 13% in Seoul trading.

After a rally fueled by interest in artificial intelligence technologies, Korea took the brunt of the global sell-off when the Iranian crisis triggered investors' flight from risk. In the first two sessions of the current week (on March 2, there was no trading in Seoul due to a holiday), the Kospi collapsed by 18%. However, in the evening of March 4, after the closing of the Korean Exchange, the mood on the world markets began to improve. Traders did not wait for the next morning and began actively buying back shares of Samsung and SK Hynix on the alternative platform Nextrade, writes Bloomberg.

According to TradingView, the best dynamics in the Kospi index on March 5 is demonstrated by Mirae Asset Life Insurance. Bloomberg attributes the rise in the insurer's shares by 30% to the company's decision to cancel its treasury shares. Quotes of the electronics board manufacturer Automobile & PCB, defense company Hanwha Systems and chip testing equipment supplier DI Corporation also jumped by more than 25%.

"To a large extent, the move reflects the actions of technical traders (who make decisions primarily on the basis of techanalysis. - Oninvest) who began buying back the drawdown in stocks after the market collapsed nearly 20% from its peak in just a few days," said Gerald Gan, chief investment officer at Singapore-based Reed Capital Partners. "It remains to be seen whether this represents a full-blown reversal to growth or just a rally in a bear market, especially amid the ongoing escalation in the Middle East," he warned.

The jump in Korean shares at the opening of trading in Seoul on March 5 was due to purchases by retail investors and closing short positions by non-residents amid a shortage of supply, Bloomberg reports citing Seoul-based NH Investment & Securities investment strategist Sean Oh. According to the expert, the rebound may continue, but it is unlikely that it will be repeated on the same scale.

"The sell-off, especially in the last two days, was driven solely by investor positioning rather than fundamentals," says Rob Lee, managing partner of New York-based hedge fund Amont Partners. According to the financier, after the collapse in the market opened opportunities for point purchase of South Korean securities. He himself made a bet on SK Hynix: a key supplier of Nvidia meets the requirements of the fund due to the ability to generate strong free cash flow and adequate market valuation.

This article was AI-translated and verified by a human editor