There wasn’t a single quiet day — here’s this week’s (August 3-7) KOSPI and KOSDAQ action, all in one place
This was a genuinely wild week. The KOSPI fell 5.10% on a weekly basis, extending its losing streak to seven straight weeks, the longest since December 2022. Yet over the same stretch, the KOSDAQ surged 10.98%. Sharp rallies and sharp drops repeated day after day, and the two semiconductor bellwethers kept swinging the index around as they always seem to. As the week wraps up, here’s a day-by-day recap of what happened.
The Rollercoaster, Day by Day
| Date | KOSPI Close | Change | Key Story |
| Fri 7/31 | 6,595.45 | +17.91% (all-time record) | Samsung Electronics’ earnings surprise, SK Hynix’s first upper-limit close in 17 years |
| Mon 8/3 | 6,257.45 | -5.12% | Profit-taking; individuals alone defended the index; capital rotated to KOSDAQ |
| Tue 8/4 | 6,358.95 | +1.62% | Falling US oil prices, Microsoft earnings tailwind; leveraged ETF trading share plunges |
| Wed 8/5 | 6,598.26 | +3.76% | 1.4 trillion won in foreign net buying; Palantir earnings, Hormuz reopening hopes |
| Thu 8/6 | 6,296.38 | -4.58% | US semiconductor index plunges; SK Hynix falls 10.37% |
| Fri 8/7 | 6,258.77 | -0.60% | Yen carry unwind fears resurface; 7th straight weekly decline |
KOSPI -5% vs. KOSDAQ +11%: A Week of Total Extremes
What stands out most is the completely opposite performance of the KOSPI and KOSDAQ. While the KOSPI fell 5.10% for the week, the KOSDAQ started from 719.76 (its July 31 close) and rose for five consecutive sessions through the middle of this week, surging 10.98% (before easing slightly to close at 798.81 on Friday). Many analysts point to the single-stock leveraged ETF regulations on Samsung Electronics and SK hynix, which took effect on the 31st of last month (raising the minimum cash deposit to 30 million won), as a major factor behind capital that had concentrated in large-cap chip names shifting meaningfully toward KOSDAQ sectors like secondary batteries, defense, and biotech.
Four Themes That Defined This Week
- The butterfly effect of leveraged ETF regulation: The deposit requirement that took effect on the 31st caused the trading value share of single-stock leveraged semiconductor products to plunge from 33.4% (7/30) to the 5% range (8/1). That freed-up capital flowed almost entirely into the KOSDAQ this week.
- The return of yen carry unwind fears: On the 3rd, the US and Japan jointly intervened in currency markets to defend the yen for the first time in 15 years, reviving fears of a repeat of the yen carry unwind that triggered a KOSPI circuit breaker on August 5, 2024. That shadow hung over markets all week.
- Extreme volatility in chip bellwethers: SK hynix rarely moved less than 5% on any single day from Monday through Friday. Korean chip stocks kept reacting to swings in the US semiconductor index in a recurring pattern.
- Whiplash in foreign investor flows: Foreign investors net bought 1.4 trillion won on Wednesday, only to flip to net selling 862.4 billion won by Friday, an unpredictable pattern that reversed direction on a near-daily basis.
Experts’ Take on the Week
Han Ji-young, an analyst at Kiwoom Securities, assessed that interpreting the KOSPI’s recent weakness as the end of its recovery path is excessive, arguing it should instead be viewed as a short-term process of absorbing excess supply. Yoo Myung-gan, an analyst at Mirae Asset Securities, noted that with individual investor inflows now slowing, foreign flows have once again become the key variable determining the index’s direction. He added that foreign selling is more likely to ease gradually over time, rather than flipping immediately to net buying.
What Investors Should Watch Next Week
- Keep watching the yen: How the yen trades following the US-Japan joint intervention is the key variable for KOSPI volatility next week.
- Confirm whether KOSDAQ strength is a trend or temporary: Whether the KOSDAQ rotation triggered by leveraged ETF regulation continues next week is the key thing to watch.
- Watch the direction of foreign flows: Signs that selling volumes are shrinking could be the first clue of the next rebound.
- Concentration in chip bellwethers remains a structural risk: The dynamic where Samsung Electronics’ and SK hynix’s swings shake the entire index didn’t change this week. It’s worth remembering the importance of diversification once again.
Taken together, this week combined profit-taking following last Thursday’s record-breaking surge, yen carry unwind fears sparked by the US-Japan joint intervention, and a capital rotation between the KOSPI and KOSDAQ triggered by leveraged ETF regulation, all converging at once. The KOSPI set an uncomfortable record of seven straight weekly declines, but the fact that this risk appears concentrated in specific sectors rather than the market as a whole made the KOSDAQ’s strength something of a silver lining. The direction of the yen and foreign investor flows are likely to be the key variables shaping the market’s direction next week as well.
Sources
- Newspim — “[Market Close] KOSPI’s 7th Straight Weekly Decline… Falls to 6,258.77 on Foreign Selling” (newspim.com)
- Segye Ilbo — “Foreign Investors Flip Again, Sell 860 Billion Won… KOSPI Falls Below 6,300, Down 0.6%” (segye.com)
- NewDaily — “US, Japan Move to Defend the Yen, Reviving Yen Carry Unwind Fears… KOSPI Tumbles Again” (biz.newdaily.co.kr)
- Businesskorea — “[Market Close] KOSPI Plunges 4.58% to Close at 6,296.38” (businesskorea.co.kr)
- Businesskorea — “[Market Diagnosis] Who’s to Blame for the Samsung/Hynix Plunge?… The 800 Trillion Won Southwestern Semiconductor Cluster” (businesskorea.co.kr)