Shares of memory chip manufacturers spearheaded a recovery in the South Korean equity market, indicating that investors remain hesitant to abandon the artificial intelligence-driven rally.

The Kospi index surged by as much as 8%, following a three-day decline that had pulled the benchmark down 15% from its all-time peak. Samsung Electronics Co. shares rebounded by up to 9.1%, while SK Hynix Inc. advanced more than 14%.

South Korean-Related ETFs jumped in overnight trading. Direxion Daily MSCI South Korea Bull 3x Shares up 12%; Franklin FTSE South Korea ETF, iShares MSCI South Korea ETF up around 4%.

The sharp, AI-powered advance that had previously driven the Kospi up over 100% year-to-date reversed swiftly at the start of the week, activating circuit breakers that temporarily halted trading. The sell-off was intensified by leveraged exchange-traded funds, which amplify price movements in the underlying assets.

"Market volatility has increased significantly, but this is a result of structural changes in the market, not a fundamental shift in the cycle's direction," stated an analyst at Samsung Securities. The analyst recommended that investors hold or increase their holdings following the recent downturn.