Seoul: South Korean stocks experienced a sharp rebound on Thursday, recovering almost 10 percent following the previous session's steepest decline ever. This rebound came amid indications of an easing in the oil price surge triggered by the ongoing Iran conflict, with the local currency strengthening against the U.S. dollar.

According to Yonhap News Agency, the Korea Composite Stock Price Index (KOSPI) surged by 490.36 points, or 9.63 percent, closing at 5,583.9. This marked a break in the three-session losing streak and recorded the largest daily gain in terms of points in KOSPI's history, surpassing the previous high of 338.41 points set on February 3. The 9.63 percent increase is the second most significant rise since October 30, 2008, when the index rose by 11.95 percent amid the global financial crisis.

The Korea Exchange (KRX), the country's main bourse operator, implemented a buy-side sidecar at the market's opening, temporarily suspending the selling of KOSPI futures for five minutes due to the heavy trade volume. Approximately 1.6 billion shares were traded, valued at 44.8 trillion won (US$30.5 billion), with gainers significantly outnumbering decliners, 898 to 21.

Individual investors were key to the rally, purchasing a net 1.79 trillion won, while foreign and institutional investors sold a net 144.6 billion won and 1.7 trillion won, respectively. "The KOSPI experienced the sharpest decline in history and dropped near the 5,000-point line the previous day," said Roh Dong-gil, an analyst at Shinhan Securities. "Bargain hunters returned to the market to pull off a turnaround."

Wall Street also saw gains overnight, with the Dow Jones Industrial Average rising 0.49 percent and the Nasdaq Composite climbing 1.29 percent as oil price hikes calmed. In Seoul, market heavyweights led the recovery, including Samsung Electronics, which surged 11.27 percent to 191,600 won, and SK hynix, which soared 10.84 percent to 941,000 won.

The automotive sector also saw significant gains, with Hyundai Motor rising 9.38 percent to 548,000 won, and Kia jumping 6.19 percent to 166,400 won. Defense shares were among the biggest winners, with Hanwha Aerospace climbing 4.38 percent to 1.38 million won and LIG Nex1 increasing 23.26 percent to 763,000 won.

Other notable performers included Shinhan Financial Group, which rose 4.62 percent to 92,900 won, internet giant Naver advancing 5.77 percent to 220,000 won, Samsung Biologics climbing 8.64 percent to 1.65 million won, and entertainment powerhouse CJ ENM increasing 5.91 percent to 64,500 won.

The Korean won appreciated against the U.S. dollar, quoted at 1,468.1 won per dollar at 3:30 p.m., an increase of 8.1 won from the previous session. Meanwhile, bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 3.4 basis points to 3.189 percent, and the yield on five-year government bonds declined 3.5 basis points to 3.442 percent.