Archive · 22 Jul 2026
Korean Stocks Surge as Margin Unwind Ends
South Korean stocks had a big jump recently.
The main stock index, called the Kospi, went up by more than 6% in one day and almost 10% over two days.
This happened because people were finishing up selling off their risky, leveraged investments.
Big companies like SK Hynix and Samsung Electronics also saw their stock prices go up.
This is good news because it means there's less risky borrowing in the market, which could lead to more stable stock prices in the future.
The Kospi index surged over 6% on Wednesday, with two-day gains nearing 10%.
SK Hynix Inc. and Samsung Electronics Co. led the rebound with significant gains.
About $1.2 trillion in market value was wiped out since June due to leveraged ETF unwinding and retail margin loan reductions.
JPMorgan Chase & Co. strategists reported that about 75% of deleveraging in leveraged ETF positions is complete.
South Korean investors reduced their leveraged stock positions to a three-month low as of July 16.
- Who
- South Korean investors, brokers, market participants
- What
- Korean stocks surged as margin unwinding neared its end
- When
- Wednesday, with two-day gains nearly 10%
- Where
- South Korea
- Why
- Due to the unwinding of leveraged bets and improved AI sentiment
Optimistic View
Cautious View
Market Recovery
Optimistic View
The significant reduction in leverage indicates a favorable risk-reward ratio and a potential for sustained market recovery.
Cautious View
The market rebound may be temporary, and concerns about the sustainability of the memory chip boom could resurface.
- Benchmark Kospi Gain
- More than 6% on Wednesday, nearly 10% over two days
- Market Value Wiped Out
- About $1.2 trillion since June peak
- Deleveraging in Leveraged ETFs
- About 75% completed
- Margin Loans Outstanding Balance
- 33.4 trillion won as of July 16, down 13% from June end
- SK Hynix Inc. Gain
- More than 9%
- Samsung Electronics Co. Gain
- More than 6%