[Anchor]
Hit by soaring global oil prices, the South Korean stock market plummeted by over 5%, pushing the KOSPI back down to the 6,000 range. In response, financial authorities have decided to accelerate the implementation of supplementary measures for single-stock leverage ETFs, which have been pointed out as a cause of the sharp volatility.
Reporter Lee Tae-gwon has the details.
[Reporter]
The KOSPI, which had previously recovered the 7,000 threshold, plunged right at the opening and fell back to the 6,000 range in just a single day.
Marking the 41st sidecar activation of the year, the index ultimately closed down 5.7% at 6,690.
As surging international oil prices heightened inflation concerns, market interest rates moved first amid expectations that U.S. benchmark interest rates would face upward pressure.
The yield on 10-year U.S. Treasury bonds rose to 4.7%, a one-and-a-half-year high, impacting the domestic stock market.
[Park Sang-hyun / Research Fellow at iM Securities: When interest rates go up, it can trigger concerns that the capital expenditures of big tech companies might slow down, which ultimately connects to having a negative impact on the domestic semiconductor market as well.]
The top two semiconductor stocks plummeted by over 7%, and foreign investors net-sold more than 3.2 trillion won, marking the first net-selling trend since the beginning of this week.
Amid criticisms of excessive volatility, President Lee Jae-myung called for a prompt response regarding single-stock leverage ETFs on the 21st, prompting financial authorities to advance the implementation of supplementary measures originally scheduled for next month.
Starting on the 31st, the basic deposit requirement will be raised from 10 million won to 30 million won.
Securities such as stocks and bonds, which were previously recognized as deposits up to 70% of their market value, will no longer be accepted, and the full 30 million won must be in cash.
If securities were sold to meet the deposit standard, the proceeds will only be recognized as a deposit after two trading days when the funds are actually credited in cash.
Because immediate purchases using the proceeds from sales are not possible, repetitive day trading will be blocked unless the full 30 million won in cash is tied up.
Starting August 19, the tracking error—the gap between the leverage ETF trading price and its actual asset value—will be managed more strictly by lowering the threshold from the current 3% to 2%.
(Video by Park Jin-ho | Video Editing by Jung Yong-hwa | Design by Kim Han-gil)
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