South Korea’s benchmark stock gauge staged a dramatic recovery on Thursday, rallying as much as 12% in early trade as local equities bounced back from two days of heavy losses that had largely wiped out the index’s gains for the year.
The KOSPI rose as much as 12% to 5,695.64 points, and traded up 10.7% by 19:14 ET (00:14 GMT). The move marked a sharp reversal after sizeable selling pressure earlier in the week.
At the center of the rebound were the country’s leading chipmakers and a major automaker. Samsung Electronics Co Ltd (KS:005930) and SK Hynix Inc (KS:000660) each climbed about 12%, while automaker Hyundai Motor (KS:005380) advanced by a similar magnitude. These names had been among the heaviest sold during the prior sessions.
Traders and investors had moved to take profits after an extended run-up. The KOSPI had been the best-performing major global stock index so far in 2026, having added nearly 50% this year as of last week when it recorded a string of record highs. That strong performance left market positioning skewed toward the long side, which contributed to the severity of the recent pullback.
The two-day bout of selling was triggered by a combination of heightened geopolitical unrest in the Middle East and growing concern about the implications of artificial intelligence. Those factors prompted a wave of profit-taking and helped sour sentiment, with the escalation between the U.S. and Iran cited as a particular catalyst that accelerated liquidations of long positions.
Even after the sharp swings this week, the KOSPI remained roughly 30% higher for the year, reflecting persistent optimism about South Korea’s exposure to AI-driven demand, especially through its chipmaking and industrial firms. That optimism had supported much of the market’s earlier gains.
Market participants also pointed to overly bullish positioning toward the end of February as an additional driver of the depth of the recent correction. As sentiment shifted rapidly, leveraged and concentrated long positions were subject to forced selling, amplifying price moves on the downside before Thursday’s rebound.
For investors focused on individual names, questions have arisen about the outlook for specific stocks such as Hyundai Motor (005380). Some services evaluate 005380 and other companies using automated models that screen fundamentals, momentum and valuation. These tools sometimes highlight past winners; the referenced examples included Super Micro Computer and AppLovin, which were noted for significant past gains in earlier assessments.
The market’s swift reversal underscores the continued sensitivity of equity flows to geopolitical developments and shifts in sentiment tied to technology-driven expectations, particularly in sectors closely linked to AI and semiconductor demand.