The KOSDAQ closed at 780.72 points, up 5.88 percent, while the KOSPI gained 1.62 percent to 6,358.95. The latest gain marked the third consecutive session of KOSDAQ outperformance since stricter rules on single-stock leveraged products took effect on July 31.
The KOSDAQ closed at 780.72 points, up 5.88 percent, while the KOSPI gained 1.62 percent to 6,358.95. The latest advance marked the third consecutive session of KOSDAQ outperformance since stricter rules on these EFFs took effect on July 31.
Under the revised rules, the minimum cash deposit required to trade them was raised to 30 million won (US$21,600) from 10 million won, and investors can no longer use stock or ETF holdings to meet the requirement. The measures followed sharp volatility in leveraged products linked to the country's two chip giants Samsung Electronics and SK hynix.
Turnover in the 16 leveraged and inverse ETFs tied to Samsung Electronics and SK hynix fell from 12.45 trillion won on July 30 to 1.39 trillion won on Monday, down 88.9 percent from the day before the new rules took effect.
Despite sharp intraday swings, Samsung Electronics and SK hynix both finished higher. Samsung Electronics, which briefly fell as much as 4.80 percent after opening 2.09 percent higher, recovered late in the session to close up 0.21 percent at 240,000 won. SK hynix also rebounded from an intraday decline of as much as 5.36 percent after rising more than 4 percent earlier in the day, ending 0.64 percent higher at 1,577,000 won.
Elsewhere on the KOSPI, Hanwha Aerospace surged 9.25 percent to 1,004,000 won, LG Energy Solution climbed 3.96 percent to 328,500 won, Samsung Biologics advanced 3.72 percent to 1,476,000 won and SK Square rose 3.41 percent to 1,060,000 won.
While the slowdown does not necessarily mean money has flowed directly into the junior stocks, market participants said reduced concentration in Samsung Electronics and SK hynix has created room for investors to rotate into previously overlooked sectors.
Foreign investors also reinforced the shift by buying KOSDAQ shares before the new rules took effect. They were net buyers for four consecutive sessions from July 28 through July 31, despite two circuit breakers during the market selloff, favoring growth stocks such as Rainbow Robotics, Alteogen, EcoPro, PharmaResearch, Techwing and Robotis.
The rotation remained evident on Tuesday. Alteogen jumped 9.29 percent to 347,000 won, HLB gained 11.17 percent to 34,350 won, ABL Bio soared 13.24 percent to 80,400 won and LigaChem Biosciences climbed 15.20 percent to 109,900 won. Robotics shares also advanced, with Robotis rising 7.89 percent to 232,500 won and Rainbow Robotics adding 1.85 percent to 467,000 won, while battery materials makers EcoPro and EcoPro BM gained 5.94 percent to 82,000 won and 5.89 percent to 102,500 won, respectively.
Still, some analysts cautioned against assuming money leaving leveraged ETFs has flowed directly into individual KOSDAQ stocks. According to Hyundai Motor Securities, retail investors' net purchases of domestic equity ETFs excluding single-stock leveraged products rose from 2.2 trillion won between May 27 and the end of June to 4.7 trillion won in July, suggesting many simply switched to other ETF products rather than individual shares.
Nevertheless, institutional investors bought a net 543.4 billion won worth of KOSDAQ shares on Tuesday, offsetting net sales of 277.2 billion won by foreign investors and 258.7 billion won by retail investors, helping extend its rally.
Across Asia, Japan's Nikkei 225 gained 0.32 percent to close at 63,957.53, extending strength in technology-related shares. China's Shanghai Composite rose 0.33 percent to 3,822.28, while Hong Kong's Hang Seng Index fell 0.77 percent to 25,807.95 as investors locked in recent gains.
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