KOSPI Bounces Back After 8 Sessions, But Forced Liquidations Pile Up

[Anchor]

The KOSPI, which had been on a record-breaking downward trend, rebounded today (Oct. 16). Foreign investors also bought up domestic stocks after a long hiatus. However, compared to the recent losses, the scale of the gain was not significant.

First, reporter Lee Tae-gwon has the details.

[Reporter]

The KOSPI has succeeded in rebounding after eight trading sessions.

Following remarks by U.S. Federal Reserve Chair Kevin Warsh that he would not pre-judge rate decisions, concerns over additional tightening eased, driving the KOSPI up by more than 4% at one point to surpass the 5,800 mark.

However, weighed down by selling pressure from retail and institutional investors late in the session, it gave up some of its gains to close up 2% at 5,668.

Foreign investors, who had continued a selling spree, turned to net buyers for the first time in nine sessions, purchasing 340 billion won today.

Samsung Electronics and SK Hynix rose 2.6% and 0.8%, finishing at 215,500 won and 1,272,000 won, respectively.

The KOSDAQ, where a buy sidecar was triggered amid a surge, closed up 4.4% at 794.

The rebound is seen as being driven by some bargain-hunting inflows, backed by the perception that the recent stock market drop was excessive.

However, analysts point out that the KOSPI's rebound was limited compared to its record 21% plunge over seven trading sessions, and the scale of foreign net buying was also minimal compared to their daily average offloading of 2 trillion won.

[Interview / Lee Jin-woo, Head of Research Center, Meritz Securities: "Today's rebound itself can be seen as having somewhat of a typical technical rebound character. Still, for now, we can probably find meaning in the market stabilizing to some extent."]

Amid the recent slump in the domestic stock market, losses continue to mount for retail investors who bought stocks on borrowed money.

Forced liquidations, where held stocks are automatically sold off due to insufficient collateral, were tallied at approximately 80.5 billion won yesterday, exceeding 80 billion won for two consecutive days.

The government stated that the domestic stock market is experiencing higher volatility compared to other markets due to differences in sector weightings, and added that it will monitor whether the impact of stock market volatility spreads to the bond or foreign exchange markets.

(Photo courtesy of Seol Chi-hwan, Video Editing by Won Hyung-hee, VJ: Lee Ji-hwan, Design: Yang Gi-tae)
※ Please note: This article was translated by AI and may contain errors.