KOSPI Drops Amid Oil Volatility... 'Leverage Measures' Accelerated

[Anchor]

The domestic stock market plummeted by more than 5% in the wake of surging international oil prices. As severe volatility with sharp fluctuations continues, financial authorities have decided to move up the implementation of stricter deposit requirements for single-stock leverage products from next month to the end of this month.

Reporter Lee Tae-gwon has more.

[Reporter]

The KOSPI, which had recovered the 7,000 mark yesterday (July 23), plummeted right at the open, sliding back down to the 6,000 range in just a single day.

A sidecar was triggered for the 41st time this year, and the index ultimately closed down 5.7% at 6,690.

As inflation concerns grew due to soaring international oil prices, market interest rates moved first on 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 as well.

[Park Sang-hyun / Research Fellow at iM Securities: If interest rates go up, it could stimulate concerns that capital expenditures by 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 sell of this week.

Amid criticism over excessive volatility, even President Lee Jae-myung called for a prompt response regarding single-stock leverage ETFs on July 21, prompting financial authorities to accelerate the implementation of supplementary measures originally scheduled for next month.

First, starting on the 31st, the basic deposit requirement will be raised from 10 million won to 30 million won.

Securities such as stocks or bonds, which were previously recognized as deposits up to 70% of their market value, will no longer be accepted, and the entire 30 million won must be in cash.

If securities were sold to meet the deposit criteria, the proceeds will only be recognized as deposits two trading days later when the funds are actually deposited in cash.

Since same-day purchases using sales proceeds will be impossible, repetitive day trading will be blocked unless the full 30 million won in cash is tied up.

Starting August 19, the tracking error—the difference between the leverage ETF trading price and its actual asset value—will be managed more strictly by lowering the limit from the current 3% to 2%.

(Photo: Yonhap News / Video by Park Jin-ho | Video Editing by Jung Yong-hwa | Graphics by Kim Han-gil)
※ Please note: This article was translated by AI and may contain errors.