The benchmark index rose 148.17 points or 2.74 percent to close at 5,553.92 points. It opened more than 4 percent higher, rose to an intraday high of 5,643, fell to 5,395.2, and later recovered to close at 5,553.92.
Retail and institutional investors bought 722.5 billion won ($483 million) and 968.3 billion won, respectively, while foreign investors sold a net 1.986 trillion won, extending their selling streak.
Most large-cap stocks closed higher. Samsung Electronics rose 1.8 percent to 189,700 won, and SK hynix gained 5.7 percent to 986,000 won. Hyundai Motor added 1.4 percent to 492,000 won.
LG Energy Solution surged 10.3 percent to 392,500 won, leading gains. Samsung Biologics rose 1.6 percent to 1,547,000 won, while Hanwha Aerospace advanced 4.5 percent to 1,335,000 won.
The broader gains reflected improved sentiment across the market.
The junior KOSDAQ gained 24.55 points or 2.24 percent to close at 1,121.44. Similar to the KOSPI, it showed early strength, briefly turned lower during the session, and later recovered its upward momentum in the afternoon. Foreign and institutional investors bought 167.1 billion won and 22.1 billion won worth of shares, respectively, while retail investors sold 159.6 billion won.
The move was driven by remarks from Trump, who signaled a weeklong delay in potential military action against Iran, citing ongoing dialogue. A sharp overnight drop in oil prices also supported the move.
But market volatility remained elevated. The KOSPI has triggered sidecar mechanisms 10 times in less than two months, one of the highest frequencies since the global financial crisis. In March alone, seven sidecars were activated. Circuit breakers were also triggered twice this month, the first such occurrence since March 2020.
The rebound came as part of a broader global rally, with Asian and U.S. equities moving higher on expectations following Trump's remarks, although underlying geopolitical risks remain unresolved. However, the broader situation remained uncertain, with markets continuing to react to headlines rather than confirmed developments.
The shift in sentiment was also reflected in global markets. Overnight, U.S. markets closed higher. The Dow Jones Industrial Average rose 1.4 percent, while the Nasdaq and S&P 500 gained 1.4 percent and 1.2 percent, respectively.
Asian markets also advanced. In Japan, the Nikkei 225 rose 1.4 percent, with automakers leading gains. Toyota Motor climbed 2.79 percent to $210.64 after announcing a $1 billion investment in U.S. plants, reinforcing expectations for continued global expansion. China’s Shanghai Composite gained 1.8 percent, and Hong Kong’s Hang Seng Index climbed 2.7 percent. Despite the gains, volatility remained a key feature of the market.
The South Korean won strengthened to 1,495.2 per dollar, reversing recent weakness as markets reacted to Trump's remarks on Iran.
Oil prices held above key levels, with Brent crude at $102.6 a barrel and West Texas Intermediate at $90.6. Frequent swings in oil prices and conflicting signals over U.S.-Iran negotiations have continued to drive volatility in global markets.
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