KOSPI Pauses Near the 7,000 Mark as Retail Investors Pour 600 Billion Won Into Bearish Inverse Bets

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[Financial News]  Although the market is approaching the era of the 'KOSPI Composite Index at 7,000,' retail investors are betting on a decline. Experts said this reflects caution after a sharp short-term rally, but added that further upside remains possible as earnings improvements led by semiconductors and artificial intelligence (AI) are becoming increasingly clear.
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According to the Korea Exchange (KRX) and the investment banking industry on the 1st, the KOSPI Composite Index closed at 6,598.87 on the 30th of last month, down 1.38% from the previous trading day, taking a brief breather just short of the 7,000 level.In April, the KOSPI Composite Index surged 31% in a single month, its strongest monthly gain since 2000. Retail investors, however, moved in the opposite direction. Last month, the most net-bought exchange-traded fund (ETF) among retail investors was the Samsung KODEX 200 Futures Inverse 2X ETF, with net purchases totaling 645.4 billion won.The product is designed to generate twice the return of the index's decline when the market falls. While the KOSPI Composite Index soared last month, the fund posted a return of -47.35%, cutting its value nearly in half. Even so, retail investors intensified their bets on a market drop. Analysts said this appears to reflect contrarian investing focused on a technical correction as the index neared the psychologically important 7,000 level.
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In the brokerage sector, the prevailing view is that the market's upward trend will remain intact despite this month's pause. Jongmin Kim, senior research fellow at Samsung Securities, said, "It is true that there is caution about the steep rise after April's explosive momentum," adding, "But even with concerns over 'Sell in May and Go Away' in May, there are no signs that the market's trend is breaking down."
Confidence in the earnings-driven rally is also strong. Eun Taek Lee, an analyst at KB Securities Co., Ltd., said, "AI investment has now reached a point where it cannot stop on its own, and strong earnings will overcome macro risks such as high oil prices," and recommended increasing stock exposure in May. He highlighted semiconductors and AI power infrastructure as promising sectors.
Regulatory changes scheduled for later this month are also seen as a factor that could increase market volatility. Wooyeol Park, an analyst at Shinhan Securities Co., Ltd., said, "A single-stock 2x leveraged ETF based on Samsung Electronics Co., Ltd. and SK Hynix is set to list on the domestic market on the 22nd," adding, "It may absorb leveraged investment demand that had been flowing overseas, but price swings in blue-chip stocks could widen more than before."
elikim@fnnews.com Kim Mi-hee Reporter