Foreign Investors Say "Now Is the Time" as They Buy 8.7 Trillion Won in a Frenzy...Retail Investors Who Sold Off 10 Trillion Won in Tears

[Financial News] South Korea's stock market, which had plunged for three straight days, staged a historic rebound on the 31st, surging nearly 18 percent in a single day. Fueled by a sharp overnight rally in U.S. semiconductor stocks, KOSPI jumped by more than 1,000 points in one day for the first time ever.
But in this record-breaking bull run, foreign investors and institutions launched a buying spree, while retail investors, gripped by fear, dumped more than 10 trillion won worth of stocks and set a new record for net selling.
According to the Korea Exchange, KOSPI closed at 6,595.45 on the 31st, up 1,001.89 points, or 17.91 percent, from the previous session. That marked the largest daily gain in history, far surpassing the 11.95 percent rise recorded on Oct. 30, 2008, during the Global Financial Crisis (GFC). The market capitalization of the Korea Exchange Main Board also quickly recovered to the 5,400 trillion won range. Buy-side sidecars were triggered in both the KOSPI and KOSDAQ markets shortly after the opening bell.
The rally was led by the semiconductor heavyweights. Samsung Electronics closed at 262,500 won, up 26.81 percent, posting its biggest daily gain on record and re-entering the global $1 trillion market-cap club. SK hynix rose 29.95 percent to 1,718,000 won, hitting its first upper limit since 2009.

Foreign investors were the main force behind the rally. On a combined basis with the alternative trading system (ATS), they bought 8.7709 trillion won worth of shares in a single day, setting a new record for net buying. Foreign investors poured more than 5 trillion won into just two stocks, SK hynix (3.5883 trillion won) and Samsung Electronics (2.103 trillion won). Institutions also lent support, posting more than 1 trillion won in net buying on the Korea Exchange Main Board.
By contrast, retail investors, who had endured extreme volatility including circuit breaker mechanism activations on two consecutive days recently, used the sharp rebound as an exit opportunity. They sold more than 10.38 trillion won net in a single day, rewriting the record for panic selling. Analysts said many retail investors, exhausted by repeated market crashes, chose to leave the domestic market with the mindset of "selling when they could get back to break-even."
Meanwhile, from that day, the requirement for new purchases of single-stock leveraged ETFs was sharply tightened, with the minimum cash deposit raised from 10 million won to 30 million won. As the rule change coincided with the index's dramatic rebound, massive retail net selling poured out of flagship leveraged products such as the Samsung Electronics Single-Stock Leveraged ETF and the KODEX SK Hynix Single Stock Leverage ETF.
One month ago, the combined total net assets (AUM) of 16 Samsung Electronics and SK hynix leveraged ETFs stood at 17.6 trillion won. That figure has now shrunk to about 5.7 trillion won, roughly one-third of its previous level. Experts said caution toward leveraged products is likely to persist for now amid tighter financial authorities' regulations and extreme market volatility, though demand for high-risk bets aimed at quickly recovering losses from the selloff is also expected to remain.
[email protected] Moon Young-jin Reporter