South Korean equities have been lately caught in a web of pain and possibilities. Those equities started April on a strong note led by chipmakers as well as easing concerns around the Iran war. The KOSPI Index surged 8.4% on Apr. 1, 2026. Samsung Electronics jumped 13%, marking its biggest gain since December 2001 while SK Hynix climbed around 11%, per Bloomberg, as quoted on Yahoo Finance.
Relief Rally Likely After War De-escalation Hopes?
The rally followed a steep selloff phase. Investor sentiment improved as both the United States and Iran signaled a possible end to their weeks-long conflict, easing fears of prolonged geopolitical disruption.
South Korea imports oil heavily. According to a report, South Korea’s dependence on Middle Eastern crude fell to 59.8% in 2021, but increased to 71.9% in 2023 amid Russia’s invasion of Ukraine, and has recently remained at around the 70% level, as quoted om Business Korea.
Hence, the Middle East oil crisis has wreaked havoc on South Korea ETFs like iShares MSCI South Korea ETF EWY. The fund added more than 2.5% on Apr. 1, 2026 but still lost over 8.5% over the past month (as of Apr. 3, 2026). The fund also inched up about 0.8% over the past week (as of Apr. 3, 2026).
AI Demand Outlook Remains Intact
According to JPMorgan Private Bank strategist Cameron Chui, easing geopolitical risks suggest that AI demand is unlikely to be disrupted, as quoted on the abovementioned Bloomberg source. Investors, who had backtracked from tech in recent weeks, are now returning to sectors with strong earnings potential and attractive valuations.
Further support came from rising memory chip prices in March, reinforcing confidence in the ongoing AI boom. In the United States, tech sentiment improved after NVIDIA announced a $2 billion investment in Marvell Technology. Microsoft is also heavily investing in South Korea to position it as a global AI hub. The initiative includes building secure data centers and strengthening local startups.
Any Caveat?
Despite the rebound, uncertainty persists. Markets continue to react to daily geopolitical developments. President Donald Trump addressed the nation on Apr. 1, 2026, outlining the rationale behind the war in Iran and signaling that the United States is approaching the final phase of its objectives.
While he did not offer a definite exit strategy, he warned that the United States would strike Iran “extremely hard” over the next two to three weeks, after which the Strait of Hormuz would “open up naturally”, as quoted on Yahoo Finance.
Meanwhile, U.S. tech companies have been threatened by Iran’s Revolutionary Guard.Amazon’s cloud computing operation in Bahrain was damaged by ???an Iranian strike, the Financial Times reported, as quoted on The Hindu. Hence, full-scale uncertainty persists. As long as the Iran war goes on, the cloud over South Korean investing will linger.
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This article originally published on Zacks Investment Research (zacks.com).
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