According to the Korea Financial Investment Association (KOFIA) on Tuesday, stocks forced to be sold due to margin calls totaled 271.7 billion won (US$200 million) last week, more than four times the 64.8 billion won recorded a week earlier.
Stocks worth 50.9 billion won were sold off last Friday alone, up from 47.6 billion won the previous day, remaining above 40 billion won for the fourth consecutive trading session.
The sharp selloffs followed a volatile week for South Korean stocks. The benchmark KOSPI briefly topped 9,100 for the first time last Monday, then plunged nearly 10 percent before rebounding and falling again over the week, triggering a wave of forced selling among investors who had borrowed money to buy stocks.
That apparently led borrowing to slow, as unpaid trading balances fell to 1.56 trillion won last Friday from 2.07 trillion won the previous day, while outstanding loans also declined for a second consecutive session to 37.76 trillion won.
But market jitters remain, as the KOSPI 200 Volatility Index (VKOSPI), South Korea's equivalent of Wall Street's VIX fear gauge stayed elevated at 94.30 as of early Tuesday afternoon, after surging to a record intraday high of 97.99 a day earlier, its highest intraday reading since the global financial crisis in 2008.
Several factors fueled the market's sharp swings including over-dominance in leveraged ETFs linked to heavyweights like Samsung Electronics and SK Hynix and lingering tensions in the Middle East.
Several factors such as excessive reliance on leveraged ETFs linked to heavyweight stocks like Samsung Electronics and SK hynix, and lingering tensions in the Middle East, continue to fuel the market's sharp swings.
Rising memory chip prices also raised fears that major technology companies such as Apple could curb spending, adding pressure on semiconductor stocks.
The South Korean bourse wrapped up another volatile day, with the KOSPI closing at 8,476.48 points after sharp swings during the session, as strong institutional buying outweighed persistent foreign selling.
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