South Korea's stock market, which plunged more than 12 percent the previous day on an 'Iran shock', rebounded sharply as bargain hunting followed perceptions that losses had been excessive.

The KOSPI closed up 490.36 points, or 9.63 percent, at 5,583.90 on Thursday. The index opened up 157.38 points, or 3.09 percent, at 5,250.92 and extended gains to an intraday high of 5,715.30, before giving up part of the advance late in the session to finish in the 5,580 range.

By investor type on the main bourse, retail investors led gains with net purchases of 1.7928 trillion won. Foreign investors and institutions sold 144.4 billion won and 1.715 trillion won worth of shares, respectively.

Top market-cap stocks also rose across the board. Samsung Electronics, the KOSPI bellwether, ended at 191,600 won, up 19,400 won, or 11.27 percent, from the previous session. SK Hynix also climbed 10.84 percent to close at 941,000 won.

Other top 10 KOSPI market-cap stocks also rebounded, including SK Square, up 11.64 percent, HD Hyundai Heavy Industries, up 9.39 percent, Hyundai Motor, up 9.38 percent, Samsung Biologics, up 8.64 percent, LG Energy Solution, up 6.91 percent, Kia, up 6.19 percent, and Hanwha Aerospace, up 4.38 percent.

The Kosdaq also jumped 137.97 points, or 14.10 percent, to close at 1,116.41, quickly recovering from the previous day's shock.

Among top Kosdaq market-cap stocks, EcoPro rose 20.18 percent, Samchundang Pharm climbed 23.41 percent and Rino Industrial surged 20.32 percent. Alteogen rose 12.05 percent, EcoPro BM gained 18.00 percent, Rainbow Robotics climbed 18.89 percent, ABL Bio rose 15.83 percent, Kolon TissueGene gained 12.29 percent, LigaChem Biosciences rose 17.36 percent and HLB advanced 10.72 percent, with all 10 stocks posting strong rebounds of 10 to 20 percent.

In Seoul's foreign exchange market, the won was trading at 1,467.90 per dollar, down 4.40 won, or 0.30 percent, from the previous session.