Korean stocks sharply rebounded on Thursday amid easing concerns over oil prices from the Iran conflict. The KOSPI index rose 9.63 percent to close at 5,583.9, while the Kosdaq surged 14.1 percent to a record daily gain at 1,116.41. The won strengthened against the U.S. dollar.
Seoul's stock market rebounded sharply on Thursday as concerns over surging oil prices from the Iran conflict eased. The benchmark KOSPI index ended a two-day losing streak, rising 490.36 points, or 9.63 percent, to close at 5,583.9 after falling 7.24 percent on Tuesday and 12.06 percent on Wednesday. This marked the second-largest daily gain on record, following 11.95 percent on October 30, 2008. The secondary Kosdaq index surged 14.1 percent to 1,116.41, achieving its largest-ever daily increase, surpassing 11.47 percent from the same 2008 date.
The rapid rebound triggered buy-side sidecars by the Korea Exchange (KRX), halting program trading for five minutes when KOSPI 200 and Kosdaq 150 futures rose more than 5 percent from the previous close. This contrasted with sell-side curbs activated on Wednesday. The volatility stemmed from U.S.-Israel military strikes on Iran on February 28.
On the KOSPI, retail investors were net buyers of 1.79 trillion won ($1.22 billion), while institutions sold a net 1.71 trillion won and foreigners 144 billion won. On the Kosdaq, foreigners and institutions led with net purchases of 831 billion won and 741 billion won, respectively, against retail net sales of 1.5 trillion won.
Analysts attributed the rebound partly to stabilized global oil prices following U.S. measures to support tanker shipments in the Persian Gulf. U.S. crude rose just 0.13 percent to $74.66 per barrel on Wednesday (local time), after gains of about 6 percent on Monday and 5 percent on Tuesday. Buying was also boosted by President Lee Jae Myung's Thursday order for a 100 trillion won market stabilization program.
Prior to the crisis, the KOSPI had risen 48.1 percent year-to-date, the fastest globally. However, analysts cautioned on ongoing volatility. Yu Sung-man, research head at Leading Investment & Securities, said, “Given the large gains in the domestic stock market over a short period, volatility is amplified, and a correctional phase is likely to continue for the time being.” He added, “Fluctuating oil prices and currency exchange rates amid the Middle East conflict are also likely to weigh on the market.” Kang Song-chul, a researcher at Eugene Investment & Securities, noted, “It is difficult to expect the extraordinary upward trend to continue as the ascent over the past few months was unusually rapid.”
The Korean won traded at 1,468.1 per U.S. dollar at 3:30 p.m., up 8.1 won from the prior session.
