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South Korea's KOSPI surges 4.1% as chip stocks recover from sharp plunge
🇸🇬 Singapore /Economy & Trade

South Korea's KOSPI surges 4.1% as chip stocks recover from sharp plunge

From CNA · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

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  • South Korea's KOSPI stock index surged 4.1% in early trading Wednesday, recovering from a near 10% plunge the previous day.
  • Retail investors drove the rebound, buying the dip out of fear of missing out, according to a strategist.
  • The market anticipates further volatility due to upcoming earnings reports and U.S. economic data.

Seoul's KOSPI stock index experienced a dramatic rebound Wednesday morning, jumping 4.1% within the first 30 minutes of trading. This surge followed a steep 10% decline on Tuesday, as retail investors flooded the market to "buy the dip." The index gained over 330 points, reaching 8,550.21, with major chip stocks like SK Hynix and Samsung Electronics leading the recovery, rising 5% and over 9% respectively.

Strategists attribute the volatility to retail investors entering leveraged ETFs out of FOMO, or fear of missing out. "More volatilities are ahead," noted Seo Sang-young, a strategist at Mirae Asset Securities Co., citing upcoming earnings reports from Micron and key U.S. inflation and jobs data as potential market movers. The market is bracing for continued fluctuations as these economic indicators loom.

Retail investors going into leveraged ETFs is what is driving this volatility, as many were waiting for chances to go into the market out of FOMO (Fear of missing out).

— Seo Sang-youngA strategist at Mirae Asset Securities Co. explaining the market's volatility.

Other major stocks also saw gains, with Hyundai Motor and Kia Corp up 1.66% and 1.97%, steelmaker POSCO Holdings adding 0.93%, and drugmaker Samsung BioLogics rising 2.04%. Despite the rebound, the KOSPI has still seen a significant rise of 102.96% year-to-date. The South Korean won has weakened 6.2% against the dollar this year, and bond yields have seen slight increases.

More volatilities are ahead, as Micron is due to report earnings soon while the US is waiting for inflation and jobs data.

— Seo Sang-youngA strategist at Mirae Asset Securities Co. predicting future market movements.
DistantNews Editorial

Originally published by CNA in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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