The KOSPI index dropped more than 4% in a single day, erasing 355 trillion won in market capitalization. The KOSPI 200 Volatility Index (VKOSPI), known as a fear gauge, remained at historically high levels, indicating a decline in investor sentiment. However, individual investors are seizing the opportunity to buy at lower prices.
On June 10, the Korea Exchange reported that the KOSPI closed at 7,730.82, down 366.11 points (4.52%) from the previous trading day. After surging 8.18% the day before to reclaim the 8,000 mark, the index fell sharply, giving back much of those gains. The total market capitalization of the KOSPI also decreased from 6,625.92 trillion won to 6,270.41 trillion won, a loss of approximately 355.5 trillion won in just one day.
The VKOSPI recorded 88.45 on this day. Although it slightly decreased from the previous day's record high of 91.23, it remained near historical peaks. The VKOSPI had risen 23.9% from 73.60 on June 2 to 91.23 on June 9, reflecting growing investor anxiety.
The stock market has been experiencing extreme volatility recently. The KOSPI fell by 1.84% on June 4, 5.54% on June 5, and 8.29% on June 8, before rebounding with an 8.18% increase on June 9, only to drop again by 4.52% on June 10. Following the previous day's surge, a buy-side circuit breaker was triggered, and on this day, a sell-side circuit breaker was activated, dramatically changing market sentiment within a day. This year, a total of 24 circuit breakers have been triggered in the stock market, with 12 for buying and 12 for selling.
Although less than half of the year has passed, the number of circuit breakers is nearing the total of 26 triggered during the 2008 global financial crisis. Additionally, three circuit breakers have been activated in the KOSPI market this year, indicating unusually high market volatility.
Despite the recent surge in volatility, individual investors have continued to buy. According to the Korea Exchange, individuals net purchased a total of 21.99 trillion won in the stock market from June 1 to June 10. Notably, during the KOSPI's sharp declines on June 4 and 5, they net bought 5.13 trillion won and 4.22 trillion won, respectively, and purchased an additional 1.76 trillion won on June 8. After the index surged over 8% the previous day, they sold 6.17 trillion won to realize profits, but returned to net buying 4.86 trillion won on this day, indicating a strategy of bargain hunting.
Individual investors are believed to be focusing their bargain purchases on large-cap semiconductor stocks that experienced significant declines. Samsung Electronics fell by 6.06%, and SK Hynix dropped by 7.54%. However, analysts have raised their target prices based on expectations of a favorable memory market and increased demand for AI. As a result, investors appear to view the recent increase in short-term volatility as a buying opportunity, particularly in leading semiconductor stocks.
On this day, securities firms raised their target prices for Samsung Electronics and SK Hynix. Meritz Securities increased its target price for Samsung Electronics from 290,000 won to 420,000 won, while Hyundai Motor Securities raised its target from 340,000 won to 440,000 won. Meritz Securities also adjusted its target price for SK Hynix from 2 million won to 2.95 million won.
No Geun-chang, a researcher at Hyundai Motor Securities, stated, "With the rise in memory prices and the effects of a weaker won, Samsung Electronics is expected to continue improving its performance, and supply shortages may persist until the first half of 2028."
* This article has been translated by AI.
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