Kospi surges record 17.9% in single day, erasing three days of losses

The Kospi surged to its largest single-day gain on record Friday, rebounding sharply after three consecutive sessions of steep losses.

The benchmark index closed at 6,595.45, up 1,001.89 points, or 17.91%, from the previous session — the largest single-day gain in both percentage and absolute point terms in the index's history.

The previous record for percentage gain was 11.95%, set on Oct. 30, 2008, during the global financial crisis. The previous record for point gain was 612.52 points, set on June 9.

The index opened up 64.23 points, or 1.15%, at 5,657.79 and quickly reclaimed the 6,000 level. It briefly touched an intraday high of 6,630.77, up 18.54%, before pulling back slightly. Analysts attributed the surge largely to bargain buying after three days of heavy losses.

Overnight gains on Wall Street also provided a tailwind, with all three major US indexes rising on the back of strength in semiconductor stocks.

Microsoft, which reported better-than-expected earnings overnight, jumped 15.51%, helping lift the Philadelphia Semiconductor Index by 8.19%.

In the domestic market, Samsung Electronics surged 26.81% to close at 262,500 won ($182), while SK Hynix soared 29.95% to finish at 1.72 million won.

SK Hynix drew additional momentum from Thursday's disclosure that SK Group Chairman Chey Tae-won had purchased 3,620 common shares worth 4.8 billion won on the open market, as well as news that the company's American depositary receipts had jumped 17.52% overnight in New York.

SK Hynix hit the daily price limit of 29.95% and closed at the upper circuit. It was the first time SK Hynix had closed at the upper limit under the current 30% daily price-limit regime.

Foreign investors led the day's rally, posting net purchases of 7.24 trillion won, while institutions net bought 1.14 trillion won. Retail investors net sold 8.27 trillion won, taking profits.

The Kosdaq also closed sharply higher, finishing at 719.76, up 74.98 points, or 11.63%.

Top-capitalization Kosdaq stocks posted broad gains: Alteogen rose 10.38%, Ecopro climbed 12.04%, Ecopro BM gained 7.25%, Rainbow Robotics advanced 16.09%, and Jusung Engineering surged 26.65%.

On the Kosdaq, foreign investors and institutions net bought 169.6 billion won and 296.7 billion won, respectively, while retail investors net sold 469.5 billion won.

While investor sentiment improved somewhat on the day's gains, anxiety remains elevated amid the market's wild swings. Buy-side sidecars were triggered in both the Kospi and Kosdaq markets early in the session as the indexes surged at the open.

Excluding Friday, the Kospi posted a closing move of 3 percent or more on 13 of the 21 trading days this month. Of those, nine sessions saw swings of 5 percent or more, and two saw moves of 8 percent or more. On Monday, the index plunged more than 10 percent.

Circuit breakers — which halt trading for 20 minutes during sharp declines — were also triggered repeatedly. The Kospi circuit breaker has been activated four times this month, accounting for roughly one-third of the 15 total activations in the index's history.

The Kosdaq circuit breaker was triggered twice this month, meaning half of this year's four Kosdaq circuit-breaker activations occurred in July alone.

Analysts have pointed to single-stock leveraged and inverse products — first introduced May 27 using Samsung Electronics and SK Hynix as underlying assets — as a key driver of the heightened volatility. The two semiconductor heavyweights together account for 50 percent of total Kospi market capitalization, and their sharp swings, amplified twofold by single-stock leveraged and inverse ETFs, have significantly deepened the market's gyrations.

New regulatory measures targeting single-stock leveraged ETFs took effect Friday, and market participants are watching closely to see whether they will help stabilize trading.

Previously, investors could trade single-stock leveraged and inverse products with a base deposit of 10 million won. Starting Friday, that threshold rises to 30 million won. Substitute securities — such as shares, ETFs and bonds, which had been counted toward the deposit at up to 70 percent of market value — are also excluded under the new rules.

Kim Jae-seung, a researcher at Hyundai Motor Securities, said the share of single-stock leveraged ETFs within retail investors' domestic equity ETF trading had been rising since May, intensifying concentration within the Kospi. "This measure should broaden the rotation of buying across the Kospi," he said.

Kim Ju-yeon, a researcher at Mirae Asset Securities, said strong earnings from US big-tech companies had helped revive AI investment sentiment, triggering a sharp rebound led by semiconductors. "The Kospi's gain has now surpassed the previous record closing-basis daily rise of 11.95% set in October 2008," she said.