iShares MSCI South Korea ETF (EWY) surged 5.05% over the past 24 hours, staging a sharp recovery as South Korean equities rebounded from a historic sell-off that had wiped out nearly 40% of the KOSPI index's value since its June peak.

The rally was fueled by a JPMorgan Chase report indicating that institutional deleveraging in the South Korean market is "substantially complete," with leveraged ETF assets shrinking from $50 billion to $17 billion and hedge fund long/short ratios falling sharply. The bank highlighted that the KOSPI's forward price-to-earnings ratio has dropped to just 5 times, describing valuations as being at "crisis levels" and suggesting that the worst of the forced selling may have passed.

Positive sentiment was further bolstered by Samsung Electronics shares surging more than 3% in early trading, while the KOSPI index reversed intraday losses to post gains after triggering circuit breakers for two consecutive days. The rebound came despite ongoing concerns about the sustainability of AI infrastructure spending and elevated retail leverage levels flagged by HSBC.