On the 28th, the KOSPI started slightly lower, taking a breather. After rising for four straight sessions to break through the 8,200 level, profit-taking appeared as demand concentrated in large semiconductor stocks following the previous day's launch of single-stock leveraged exchange-traded funds (ETFs) for Samsung Electronics and SK hynix.
As of 9:37 a.m., the KOSPI was down 71.01 points, or 0.86%, at 8,157.69. The index opened at 8,165.73, down 62.97 points, or 0.77%, from the previous day.
In the main board, foreigners were net sellers of nearly 1.5 trillion won, while individuals and the National Pension Service bought a net 1.1512 trillion won and 161.3 billion won, respectively, helping to defend the lower end of the index.
Samsung Electronics and SK hynix, which surged the previous day, are both down more than 1%. In contrast, LG Energy Solution is up more than 10% on news it signed a 2.4 trillion won energy storage system (ESS) supply contract with a U.S. energy company.
Han Ji-young of Kiwoom Securities said, "Although oil plunged more than 5% and U.S. stocks rebounded intraday, the Philadelphia Semiconductor Index's weakness and profit-taking pressure from the domestic semiconductor rally are likely to limit the index's upside, leading to a rotational market by sector."
The single-stock leverage and inverse ETFs for Samsung Electronics and SK hynix listed the previous day are also cited as factors increasing market volatility.
According to Daol Investment & Securities, the total transaction value of 18 single-stock leverage and inverse ETF products the previous day was 9.8 trillion won, and assets under management (AUM) came to 4.9 trillion won. By underlying asset, the SK hynix leverage product rose about 19%, while the Samsung Electronics leverage product gained about 5%.
Analyst Han Ji-young said, "The supply-and-demand 'black hole' created by single-stock leverage could continue today," adding, "The KOSPI's recent move into the 8,200 range confirms a bull market, but we should be prepared for the risk that concentration leads to short-term profit-taking and greater volatility."
The KOSDAQ opened at 1,136.13, up 3.00 points, or 0.26%, from the previous session, but quickly turned lower and is showing weakness of nearly 2%.
Most of the top-cap stocks are falling. EcoPro BM and HLB are up more than 1%, but Alteogen, EcoPro, and Rainbow Robotics are declining.
Overnight, New York stocks hit record highs across the three major indexes on hopes for a U.S.-Iran end-of-war deal. The Dow Jones Industrial Average rose 0.36%, while the Standard & Poor's (S&P) 500 and the Nasdaq gained 0.02% and 0.07%, respectively.
Micron, which topped a $1 trillion market cap, extended gains of more than 3%, but major semiconductor names including Nvidia, AMD, and Intel weakened on profit-taking.
This morning, the Bank of Korea's monetary policy committee is scheduled to meet on the policy rate direction. The market expects the Bank of Korea to keep the base rate unchanged at 2.50% while signaling a hawkish tilt toward possible hikes ahead. Concerns about a prolonged Iran war leading to a weak won, high oil prices, and high inflation are increasing the need for rate hikes.