From MarketWatch, July 8:
Kospi index in South Korea is stumbling after huge gains
On June 19, the Kospi peaked at 9385 and was showing a return of 122% for the year. Come July 8 and South Korea’s benchmark index has entered technical bear market after closing down 5% Wednesday, bringing its peak-to-trough slump to 22%.Why has it fallen? Gravity is the main reason. After almost quadrupling from May 2025, the temptation to book profits had become irresistible.
International investors have been selling for most of the year and Citi’s fund flow insights published July 3 noted outflows of $11.7 billion the week before. Much of the impetus for the continued ascent of Korean stocks came from heavy participation of domestic retail investors — better known as “ants’”— many of whom were using leverage to gain exposure.
The vast majority of index gains were contributed by the two index heavyweights, Samsung Electronics and SK Hynix, who between them comprise half of the Kospi. Despite stellar earnings from both, concerns have surfaced in recent weeks about the sustainability of the semiconductor cycle and the issuance of up to $29 billion of new SK Hynix equity — via the listing of a depositary receipt on Nasdaq this Friday — has also absorbed a lot of demand.
There are other factors at play....
....MUCH MORE
