KOSPI Posts Sharpest Bounce in Weeks After Trump Says Iran War Could End in Two to Three Weeks

The Catalyst

Trump told White House reporters on March 31 that the US could complete its Iran operations "in two weeks, maybe two weeks, maybe three" and that Tehran didn't need to sign a deal for the fighting to stop. The same day, both Washington and Tehran signaled a willingness to end hostilities, the first time the two sides appeared aligned on de-escalation since the war began five weeks ago.

Wall Street moved first. The S&P 500 jumped 2.9%, the Dow gained 2.5%, and the Nasdaq added 3.8% on the session — setting up a massive overnight gap for Asian equities. KOSPI opened April 1 at 5,330, already 5.5% above the prior close, and kept climbing to 5,461 by the afternoon — an 8.1% gain that triggered the Korea Exchange's sidecar mechanism after KOSPI 200 futures ripped 5%, automatically pausing program trading for five minutes to contain the momentum.

What March Did to Korea

The bounce needs context. KOSPI had just posted its worst month since the 2008 financial crisis, falling 19% from its late-February record high of 6,307 to close March 31 at 5,052 — the edge of a technical bear market at a 19.9% drawdown.

Foreign investors were the sellers. They dumped a record 35.9 trillion won ($23.5 billion) of KOSPI shares in March, with Samsung Electronics absorbing 16.3 trillion won and SK Hynix taking 7.2 trillion won of that flow. Korean retail bought nearly all of it — 15.3 trillion won in Samsung alone — but couldn't stop the slide. The won breached 1,530 per dollar, levels not seen since the 2009 crisis.

The selling had two drivers: the Iran war disrupting energy supply chains and oil prices, and Google's TurboQuant paper claiming 6x memory reduction for AI inference, which specifically kneecapped Samsung and SK Hynix — the two stocks that make up over 40% of the KOSPI's market cap.

What to Watch

Samsung finished April 1 up 6.3% at 177,000 won and SK Hynix gained 7.6% to 868,000 won. Hyundai Motor added 5.2%, SK Square 7.6% — this was broad-based, not just a chip trade.

But the ceasefire signal is exactly that — a signal, not a deal. Iran's Foreign Minister Abbas Araghchi told Al Jazeera that no formal negotiations are underway despite the exchange of messages. Trump himself set an April 6 deadline: if the Strait of Hormuz isn't reopened, the US would escalate strikes to Iranian power plants, oil fields, and Kharg Island. That gives this rally five days of runway before the next binary event.

The 8% KOSPI bounce recovers roughly one day's worth of March's 19% drawdown. Even after April 1, the index sits about 13% below its February record. For EWY holders and perp traders, the question is whether this is the start of a positioning unwind — foreigners reversing that record $23.5 billion outflow — or a dead cat bounce in a war that isn't actually over.

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