Korean stock market surges 11% and hits the circuit breaker!

Asian and Japanese stock markets surge.

On March 5th, the Asia-Pacific markets opened sharply higher. As of the time of writing, the Nikkei 225 index rose over 4%, and the KOSPI index in South Korea increased more than 11%. Due to the surge, the Korea Exchange triggered the KOSDAQ index circuit breaker in the early trading session, pausing programmatic trading for 5 minutes.

In news, Lee Eog-weon, Chairman of the Korea Financial Services Commission, stated on Wednesday that Korea is closely monitoring the stock market. If market volatility becomes excessive, they will actively deploy their 1,000 trillion won (approximately 470 billion RMB) market stabilization plan. He added that Korea is watching for disruptive behaviors that could occur during increased market fluctuations and will strictly punish any violations.

On March 4th (Wednesday), the three major US stock indexes closed higher, led by technology stocks. As tensions between the US and Iran develop, oil prices retreated from their previous surge, and concerns about slowing US economic growth eased. Major stock indexes continued their upward momentum from the previous trading session.

At the close, the Dow Jones Industrial Average rose 238.14 points, or 0.49%, to 48,739.41; the Nasdaq gained 290.79 points, or 1.29%, to 22,807.48; the S&P 500 increased by 52.87 points, or 0.78%, to 6,869.50.

Technology stocks, especially the chip sector, supported the market. SanDisk, Micron Technology, and AMD each rose over 5%, while Broadcom and NVIDIA gained more than 1%.

Oil prices retreat from their surge

In the oil market, international benchmark Brent crude and US West Texas Intermediate (WTI) contracts are trading near flat levels.

On Wednesday, strong economic data boosted investor sentiment. First, the ADP report showed that private sector employment in February increased more than expected. Additionally, the US non-manufacturing sector saw better-than-expected growth last month, and inflation pressures eased.

In response to economic data, oil prices lost momentum. US Treasury Secretary Steven Mnuchin announced on Wednesday that the US will implement a “series of measures” to support oil flow through the Persian Gulf. Both Brent crude and WTI prices declined for the first time since tensions in the Middle East escalated. Both contracts closed well below their intraday highs on Tuesday.

President Trump stated on Tuesday that the US would provide risk insurance for all maritime trade passing through the Persian Gulf to encourage tankers to resume navigation through the Strait of Hormuz. His comments helped ease recent oil price gains.

Previously, oil shipments through the Strait of Hormuz—one of the world’s most critical oil transit routes—stalled after Iranian Revolutionary Guard commanders threatened to destroy any ships attempting passage.

Mnuchin also said that the 15% global tariffs announced by Trump last month will be implemented this week. However, he believes US tariffs will “drop back to pre-tariff levels within five months,” before the Supreme Court overturns Trump’s tariff policies.

Tesla gains favor from US banks

In sectors, the S&P 500’s eleven major sectors saw eight advance and three decline. Consumer discretionary and technology led gains with increases of 2.24% and 1.27%, respectively. Energy and consumer staples declined by 0.73% and 0.53%, respectively.

Most large tech stocks rose. Seagate, Intel, and Micron each gained over 5%, Amazon and Tesla rose more than 3%, ASML and Oracle increased over 2%, Meta, NVIDIA, TSMC, Broadcom, and Qualcomm each gained over 1%. Netflix and Microsoft saw modest gains, while Google-A and Apple declined slightly.

Tesla closed up 3.44%, with a trading volume of $27.148 billion. Tesla recently received a new confidence vote from US banks. Bank of America resumed coverage of Tesla stock with a “Buy” rating. Analysts see Tesla as a “leader in autonomous driving” and cite progress in autonomous and robotics technology as reasons for an upgrade. They also expect Tesla’s market share to grow under stricter EV regulations. The rating upgrade may boost market confidence in Tesla’s stock, which has recently been under pressure due to increased competition, declining EV sales, and weak sentiment in some AI-related stocks.

Financial stocks mostly rose. Wells Fargo, Barclays, American Express, and First Capital Financial each gained over 1%. Morgan Stanley, Deutsche Bank, MetLife, Charles Schwab, Hartford Insurance, Bank of America, U.S. Bancorp, Goldman Sachs, Citigroup, BNY Mellon, Travelers Insurance, regional banks, Hartford, UBS, Visa, Mizuho Financial, Mastercard, JPMorgan Chase, BlackRock, and AIG saw slight increases or decreases.

Most energy stocks declined. US Energy fell over 22%, ConocoPhillips and Apache each dropped over 2%, Chevron, Schlumberger, ExxonMobil, and Petrobras declined over 1%. Occidental Petroleum and BP saw slight declines, while Duke Energy, Imperial Oil, and Shell rose modestly.

Most popular Chinese concept stocks rose, with the Nasdaq Golden Dragon China Index (HXC) up 0.8%. NIO surged over 5%, Bilibili and Kingsoft Cloud gained over 3%, Tiger Securities and New Oriental rose over 2%, XPeng, NetEase, Futu, and Li Auto each increased over 1%. Vipshop, Huya, Pinduoduo, and Baidu saw small gains, while Tencent Music and JD.com declined slightly, and Ctrip and Alibaba fell over 1%, iQiyi dropped over 2%.