The Korean stock market suffered a huge setback on Thursday, when KOSPI went down by 7%, and the Korean Exchange started a temporary cut-off mechanism. SK Hercules and Samsung electronics have fallen, and the Tokyo market has clearly weakened, with the market revisiting the valuation tolerance of the AI chip.

The chip stock drags Asian markets

The MSCI Asia-Pacific index fell by 1.5 per cent, ending two days ago. Unlike the weakening of the Korean-Japanese market, Hong Kong's share of heinous technology has continued to rise in the index plate, leading to the increase in Ali Baba, indicating a polarization of the Asian technology unit.

According to the institutional perspective, the Korea Core Science and Technology Unit has experienced sharp fluctuations over a short period of time in excess of the Manifesto 225 index, reflecting the fragile liquidity of the local market and its vulnerability to emotional and financial shocks.

The Korean Central Bank announced a hike.

The Central Bank of Korea announced a raise on Thursday, the first interest rate increase in more than three years, and the end of a liberal cycle since the end of 2024. Markets believe that economic growth is stronger than expected and that inflation remains sticky, which is the main reason for this policy shift.

Analysts mentioned that, in addition to coping with inflation, there were considerations to stabilize the Korean Won and curb leveraging of stock investment. As policy positions tighten, the market begins to discuss whether the KCB will continue to increase interest rates and how fast it will be.

Leverage ETF Loss Increase

The Korean Financial Regulatory Authority has indicated that a response to Samsung electronics and SK Hercules single stock leverage ETF will soon be published. According to the Finance Committee, consultations are under way with the Ministry of Finance, the Central Bank of Korea and the Financial Supervisory Authority, with the aim of protecting investors and stabilizing markets.

  • ETF valuation loss 88337 trillion won
  • Managing assets dropped from 14.3518 trillion won to 89389 trillion won.
  • 14 Leveraging only ETF assets decreased by 41.4 per cent over the same period

Data from the Korea Capital Markets Institute show that, as of June 19, individual investors had accumulated net purchases of single-stock leverage ETFs amounting to 8.2 trillion won, or about 60 per cent of the size of the related ETF assets. This means that a significant part of the recent loss of such products may be borne by individual investors.

It's the next focus.

After the second upswing in the ASML year, the market would have expected the chip plate to be supported, but the stock price response was weak. Investors will then turn their focus to the soon-to-be-published financial statements of the build-up, to see if AI demand, capital expenditure and the future of the order will stabilize the regional science and technology mood.