South Korean shares, which had slumped the previous day, rebounded sharply on expectations of easing Iran-related risks and an inflow of bargain hunting. The KOSPI rose more than 5 percent to reclaim the 5,500 level, and the KOSDAQ also gained more than 3 percent.

On March 10, the KOSPI closed up 280.72 points, or 5.35 percent, at 5,532.59 from the previous session. The index opened strong at 5,523.21, up 271.34 points, or 5.17 percent, and at one point rose to 5,595.88, firmly regaining the 5,500 level.

Foreign investors led the rebound with net buying of 1.0978 trillion won, and institutions also joined with net buying of 847.6 billion won. Individuals, meanwhile, took profits with net selling of 1.8335 trillion won.

Most top market-cap stocks rose. Samsung Electronics closed at 187,900 won, up 8.30 percent, and SK Hynix surged 12.20 percent to finish at 938,000 won.

SK Square rose 8.84 percent, Doosan Enerbility 6.55 percent, Hyundai Motor 3.55 percent, LG Energy Solution 2.09 percent, Hanwha Aerospace 1.46 percent, Samsung Biologics 0.82 percent and Kia 4.95 percent.

The KOSDAQ also ended up 35.40 points, or 3.21 percent, at 1,137.68.

In Seoul's foreign exchange market, the won was trading at 1,467.40 per dollar, down 0.10 won, or 0.01 percent, from the previous session.

Even as stocks rebounded, financial authorities moved to manage risks from margin trading loans.

Lee Chan-jin (이찬진), governor of the Financial Supervisory Service, held a video conference with executives during a business trip to Basel, Switzerland, saying financial market uncertainty stemming from the Middle East situation could persist for a considerable period. He urged stronger guidance on investment risks related to margin trading and monitoring of investment trends in leveraged exchange-traded funds (ETFs).

The FSS also plans to urgently convene executives from around 10 firms, including major securities companies, on March 11 under Vice Governor Hwang Sun-oh (황선오), in charge of capital markets and accounting, to check risk management.

According to the Korea Financial Investment Association, outstanding margin trading loans stood at 32.7899 trillion won as of March 6, and on March 4 they topped 33.0 trillion won for the first time ever.

Major securities firms including Korea Investment & Securities, Shinhan Securities, NH Investment & Securities and KB Securities have been halting new margin-loan purchases in succession.