KOSPI Rebounds Sharply Amidst Middle East Tensions and Savings Bank Rate Hikes

Seoul, South Korea – March 10, 2026 – The Korea Composite Stock Price Index (KOSPI) experienced a significant surge on Monday, March 10, 2026, rebounding from a sharp decline the previous week. This recovery comes as geopolitical concerns in the Middle East continue to fuel market volatility and prompts adjustments in South Korea’s savings bank sector.

KOSPI’s Dramatic Recovery

As of 9:02 am KST on March 10, the KOSPI rose 286.28 points (5.45%) to 5,538.15. The index opened at 5,523.21, up 271.34 points (5.17%) from the previous day’s close. Simultaneously, the KOSDAQ also saw gains, rising 51.54 points (4.68%) to 1,153.82. This follows a substantial drop on March 9, 2026, when the KOSPI lost 400.56 points, or 7.17 percent, reaching an intraday low of 5,184.31 [Yonhap News Agency]. The initial decline was attributed to escalating geopolitical tensions in the Middle East and rising international oil prices, prompting the main bourse operator to issue a sell-side sidecar.

Savings Banks Adjust to Market Volatility

The KOSPI’s recovery is coinciding with a shift in strategy among South Korean savings banks. As stock market volatility increases, these banks are competing to attract short-term funds by raising interest rates on parking accounts and term deposits. Parking accounts, which offer interest even on single-day deposits, are being utilized to temporarily store funds awaiting investment opportunities.

Increased Interest Rates

OK Savings Bank is offering interest rates of up to 7% per year on its ‘OK Chan Tech Account Ⅱ’, ‘OK Peanuts Public Parking Account’ and ‘OK Short Man Supporter Account’. Accuon Savings Bank’s ‘Money Collection’ offers a maximum annual interest rate of 5%. Term deposit rates are also seeing a slight increase, with the average one-year maturity term deposit rate across 79 savings banks rising from 2.98% to 3.09% over the past month.

Moa Savings Bank’s ‘Birthday Celebration Revolving Term Deposit’ currently offers 3.35% per annum, while Dongyang and Choheung Savings Bank offer 3.34% per annum.

Impact on Money Market Funds

According to a banking sector official, while parking accounts represent a small portion of total receipts, they are significant in capturing short-term funds. The balance of money market funds (MMF) at the five major South Korean banks – KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup – reached 22.9613 trillion won as of March 5, a 3.8% increase from the conclude of the previous month, before the recent Middle East unrest [korean-vibe.com].

Looking Ahead

The KOSPI’s recent volatility and the subsequent adjustments in the savings bank sector highlight the interconnectedness of global events and the South Korean financial market. Continued monitoring of geopolitical developments and their impact on investor sentiment will be crucial in the coming weeks.