Korea's KOSPI jumps 17.91% in one day
The KOSPI closed 17.91% higher on 31 July, its largest single-day gain ever
The three lines
- The KOSPI rose 1,001.89 points to 6,595.45, setting records for both percentage and point gain
- Foreign investors bought a net 7.2 trillion won as forced selling was read as finished
- Selling pressure that had defined July reversed, and brokerages began talking about a floor
Key questions
- Why did the KOSPI rise so much
- Three forces landed on the same day. A hedge fund liquidation that had been dumping Korean equities was seen as complete, second-quarter chip earnings beat expectations, and the won firmed against the dollar. Foreigners turned net buyers after weeks of selling.
- What happened to SK hynix shares
- SK hynix hit its 30% daily limit for the first time since the current price band took effect in June 2015, after reporting HBM4 shipments and long-term supply agreements on its Q2 earnings call.
- Is this the largest one-day gain in KOSPI history
- Yes, on both measures. The 17.91% gain and the 1,001.89-point move are each the largest since the index began in 1980.
Korean equities had spent most of July going one direction. On 31 July they went the other, and further in a single session than they ever had. The KOSPI closed at 6,595.45, up 1,001.89 points or 17.91% — the largest one-day move by both measures since the index began in 1980. What follows separates the three things that happened at once, because they are usually reported as one.
1. What moved
Three forces arrived on the same day, and only one of them was news.
The first was the end of a forced seller. A leveraged fund had been liquidating Korean positions through July, and reports that a larger firm had taken over its book removed the overhang. Nothing about Korean company fundamentals changed; the marginal seller simply stopped.
The second was earnings. SK hynix said on its second-quarter call that HBM4 mass-production shipments had begun and that long-term supply agreements were signed with roughly ten customers. The stock hit its 30% daily limit, its first under the price band in force since June 2015.
The third was the currency. A firmer won raises the dollar value of Korean holdings for foreign investors, which matters when those investors are deciding whether to re-enter.
2. The numbers
| Figure | |
|---|---|
| Close | 6,595.45 |
| Point gain | 1,001.89 |
| Percentage gain | 17.91% |
| Foreign net buying | about 7.2 trillion won |
| Retail net selling | about 8.25 trillion won |
| Previous record gain | far below both measures |
The flow direction is the part worth holding onto. Foreigners bought roughly 7.2 trillion won net after weeks of selling; retail investors sold about 8.25 trillion won into that bid. The exact figures differ by outlet — 7.2196, 7.2412 and 7.2499 trillion won all appear — because settlement timing differs, so the round number is the honest one until the exchange publishes its final tally.
3. What is still open
Whether the liquidation is actually complete is an interpretation, not a fact. Brokerages moved quickly to describe the session as a floor-forming event, but no one outside the funds involved knows how much stock remains to be sold. The size of the liquidating book is itself disputed: reports put it above $20bn or near $45bn at peak, which is a wide enough range that no figure is used here.
A one-day move of this size also says something about liquidity rather than value. When a forced seller leaves a market that has already thinned out, prices can travel a long way on modest volume. The mechanics of that process, and why the rebound tends to follow the selling rather than accompany it, are covered in a companion piece published the same day.