The rebound in South Korea’s stock market was largely driven by a reversal of leveraged selling, said Daniel Yoo, global market strategist at Yuanta Securities. “It has nothing to do with fundamentals,” he said.<\/p>\n
A wave of margin calls among retail investors had triggered heavy selling earlier in the week, but once those positions were unwound the market began to recover, he said.<\/p>\n
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Year-to-date performance of South Korean shares<\/p>\n
“The sell-off [on Wednesday] was mainly driven by the upside risk around oil prices stemming from the evolving geopolitical developments,” said Raisah Rasid, global market strategist at J.P. Morgan Asset Management. <\/p>\n
“As South Korea is a major crude oil importer, uncertainty around how far oil prices could rise may weigh on the current account balance and add to inflationary pressures,” she said.<\/p>\n
As oil prices began to stabilize, risk sentiment improved and Korean equities bounced, said market watchers.<\/p>\n
U.S. Treasury Secretary Scott Bessent said<\/a> on Wednesday that Washington will roll out a series of measures aimed at stabilizing oil shipments through the Persian Gulf, signaling that the government is prepared to step in as geopolitical tensions threaten one of the world’s most critical energy corridors.<\/p>\n Additionally, demand-supply dynamics in the memory chips space, is likely to remain tight through this year and possibly the next, JPMorgan’s Rasid said, adding that the long-term structural drivers for Korean equities remain intact. Memory leaders Samsung and SK Hynix constitute almost 50% of the index<\/a>, Morningstar data showed.<\/p>\n Similarly, Aberdeen Investments’ Kieron Poon, investment director of Asian equities, said that the sell\u2011off on Wednesday was also compounded by the Korean market catching up after a public holiday on Monday, so Tuesday’s drop reflected pent\u2011up risk-off sentiment and losses.<\/p>\n Other Asia-Pacific markets also jumped Thursday, rebounding after several days of steep losses as sentiment improved following overnight gains on Wall Street and easing concerns over surging oil prices.<\/p>\n Australia’s\u00a0S&P\/ASX 200<\/a> gained 0.44% to ending the trading day at 8,940.3.<\/p>\n Japan’s Nikkei 225<\/a> rose 1.9%, closing at 55,278.06.<\/p>\n Hong Kong Hang Seng index<\/a> was up 0.35%, while the CSI 300 rose 0.98% to 4,647.69 after China on Thursday set its GDP growth target for 2026 at 4.5% to 5%<\/a>, the lowest target on record going back to early 1990s, as Beijing grapples with persistent deflationary pressures and trade tensions with the U.S.<\/p>\n That target marks a downgrade from the “around 5%” set in the past three years and the most modest goal so far for the world’s second largest economy, barring 2020 when Beijing did not set a growth target due to the pandemic.<\/p>\n Beijing also kept its budget deficit target unchanged from last year’s “around 4%” of GDP, as the National People’s Congress, the country’s top legislative body, holds its annual meeting this week.<\/p>\n “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,” Aberdeen’s Poon noted.<\/p>\n Overnight in the U.S., stocks rose, building on the momentum seen late in the previous session, as the surge in oil prices pulled back following developments in the\u00a0U.S.-Israeli war on Iran<\/a>\u00a0and fears about a U.S. economic growth scare faded.<\/p>\n The\u00a0Dow Jones Industrial Average<\/a>\u00a0added 238.14 points, or 0.49%, to close at 48,739.41. The 30-stock index snapped a three-day run of losses. The\u00a0S&P 500<\/a>\u00a0gained 0.78% and ended at 6,869.50, while the\u00a0Nasdaq Composite<\/a>\u00a0moved 1.29% higher and settled at 22,807.48.<\/p>\n Technology stocks supported the broader market, particularly those in the chips space.\u00a0Micron Technology<\/a>\u00a0and\u00a0Advanced Micro Devices<\/a>\u00a0each advanced more than 5%.\u00a0Broadcom<\/a>\u00a0and\u00a0Nvidia<\/a>\u00a0climbed more than 1% apiece.<\/p>\n