KOSPI recovers toward 5,900 after record volatility and heavy foreign selling
Cease-fire hopes ease oil and FX stress, while defense and energy plays stay in focus
South Korea’s equity market is staging a tentative recovery after one of its most volatile months, with heavyweight chipmakers Samsung Electronics and SK Hynix rebounding from sharp swings triggered by the Middle East war. The KOSPI briefly pushed above 5,900 on April 10 as foreign and institutional investors turned net buyers again, helped by expectations that the U.S.–Iran cease-fire will hold and that Israel will pursue negotiations with Lebanon rather than escalation.
The rebound follows a brutal selloff that saw the benchmark index tumble more than 7% in a single session in early March, when fears of a wider regional conflict and potential disruptions at the Strait of Hormuz sparked a rush for the exits. Foreign investors offloaded more than 30 trillion won of Korean equities that month, according to local data, triggering multiple volatility halts as the KOSPI slid from record highs above 6,300 to lows near 5,100. Tech bellwethers were at the center of the storm, with Samsung and SK Hynix both suffering double-digit intraday losses at the height of the panic.
In recent sessions, that pattern has flipped. Hopes that Washington and Tehran will maintain their two-week cease-fire, along with signals that Israel may seek a negotiated solution with Lebanon over Hezbollah’s disarmament, have helped global risk sentiment improve. U.S. stocks logged a second straight day of gains on April 9, and volatility gauges have retreated toward pre-war levels. In Seoul, Samsung has climbed back above 210,000 won and SK Hynix has reclaimed 1,030,000 won, recovering much of the ground lost during the worst of the selloff as investors refocus on the memory supercycle driven by AI demand.
Analysts say the episode has underscored both the vulnerability and resilience of Korea’s market. Semiconductor names remain exposed to swings in geopolitical risk and disruptions to specialty gases sourced from the Middle East. Yet earnings momentum for AI-related memory chips continues to surprise to the upside. At the same time, Korea’s defense stocks have continued to outperform, supported by growing export backlogs and renewed interest from Middle Eastern buyers, while higher oil prices and freight rates have buoyed energy and shipping shares.
Strategists caution that the current rebound does not eliminate the risk of further volatility if cease-fire talks falter or fresh shocks emerge from the region. However, they argue that the sharp foreign exodus of recent weeks could set the stage for additional inflows if energy and currency markets stabilize. For global investors, the latest swing in Korean assets has become a live test of how a highly cyclical, export-driven market behaves when geopolitical risk collides with a powerful structural story in semiconductors.
By Min Byung-kwun, KDFN
kdf＠kdfnews.com
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