South Korea's benchmark KOSPI index experienced a week of extreme volatility, staging a historic rebound only to be followed by a sharp decline, highlighting the market's sensitivity to geopolitical tensions and global sentiment. On Thursday, March 5, 2026, the KOSPI surged between 9.6% and 11% intraday, closing up 9.63% at around 5,584 points. This dramatic rally effectively erased most of the nearly 20% slump it suffered over the previous three days, which was driven by fears surrounding the Iran conflict and oil prices spiking above $80.
The rebound was so forceful that the Korea Exchange had to reactivate its "sidecar" trading curb, briefly halting program trading for five minutes as buying overwhelmed the order book. The junior KOSDAQ index exploded even higher, gaining 14.1%. The rally was led by tech giants Samsung Electronics and SK Hynix, which soared between 10-16%, pulling the entire market higher as foreign and institutional investors turned from net sellers to aggressive buyers.
However, the relief was short-lived. By the next trading session on March 6, the KOSPI plunged 1.20%, one of the region's most substantial single-day declines. This drop brought the index to its lowest closing level in three weeks, erasing gains from February's rally. Technology stocks, particularly semiconductor giants, were significant weights on the benchmark, alongside automotive manufacturers and financial institutions.
The volatility was attributed to shifting sentiment. The initial rally was buoyed by hopes for diplomacy in the Iran conflict, stabilizing oil prices (with Brent crude slipping from $84 highs), and overnight gains on Wall Street. The subsequent decline was driven by weak export data, accelerating foreign investor outflows, domestic consumption concerns, and lingering regional geopolitical tensions. Analysts caution that the KOSPI's path remains bumpy as geopolitics, oil prices, and AI sentiment continue to collide.
