KOSPI Struggles to Hold 7,000 as Bank of Korea Flags Record Volatility
South Korea’s KOSPI dipped towards 6,920 early Thursday earlier than recovering to 7,058.06, up 0.09% on the day. The swing got here as the Bank of Korea (BOK) stated the index’s every day volatility this yr is the widest of any main market.
The BOK measured every day volatility at 4.1%, roughly double Japan and Taiwan. Samsung Electronics, SK Hynix, Hyundai Motor and LG Energy Solution all traded decrease earlier within the session as overseas traders offered a web 496.4 billion received of shares.
Semiconductor focus drives the swings
The BOK’s September credit report traced the KOSPI’s plunge from above 9,200 to the 6,200 vary final month to heavy semiconductor sector weighting. Samsung and SK Hynix make up 51.2% of the index and drove 69.3% of its decline in that selloff.
Two-times leveraged exchange-traded funds (ETFs) tied to the 2 chipmakers grew from $3.33 billion to $10.7 billion in a single month after their May itemizing, deputy governor Park Jong-woo stated. Retail margin loans additionally hit a file earlier than unwinding sharply through the correction.
Oil and yields add contemporary stress
Thursday’s early dip got here as Brent crude held above $100 a barrel on renewed Middle East combating, whereas the US 10-year Treasury yield sat close to 4.84%. South Korea’s import-dependent economic system is particularly uncovered to vitality shocks.
The session additionally marked quadruple witching, including derivatives-driven volatility simply as Kospi’s chip rally tried to maintain its footing. Kiwoom Securities analyst Han Ji-young still expects buybacks and returning overseas consumers to provide assist.
The BOK advisable nearer monitoring of leveraged ETFs, cautioning that their current shrinkage doesn’t take away the necessity for continued oversight.
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