South Korean stock market rebounds, closing up 3.6%, as sell-off triggered by leveraged trading slows down

Odaily News South Korean stocks rebounded on Tuesday, as the intense sell-off triggered by the unwinding of leveraged positions began to ease, allowing investors to refocus on the inherent strength of this market, which sits at the core of the global AI trade. The Korea Composite Stock Price Index (KOSPI) closed up 3.6% at 6,747.95 points, after rising as much as 4.9% during the session. This followed a plunge of 10.5% over the previous two trading days. The KOSPI remains deep in bear market territory, having fallen 25% from its all-time closing high set on June 22. However, with regulators taking steps to curb leveraged financing products, market attention is shifting back to fundamentals, including sustained strong demand driven by artificial intelligence and the still-optimistic earnings prospects for memory chip manufacturers.

JPMorgan Chase analysts noted: "The fundamental strength of the market remains robust over the next few years." They maintained an "overweight" rating on the South Korean market in their regional asset allocation, with a 12-month target of 12,500 points. "The market should be able to overcome the shock from position unwinding and continue its positive trajectory." (Jin Shi)