KOSPI Plummets 10% for Sixth Time This Month

◆Aju Economy Major News
▷KOSPI Plummets 10% for Sixth Time This Month
- On July 28, the KOSPI closed at 6023.66, down 732.09 points (10.84%) from the previous trading day, marking the sixth drop of over 5% this month, following declines of -7.89% on the 2nd, -5.35% on the 8th, -8.95% on the 13th, -6.37% on the 16th, and -5.72% on the 24th.
- In response to the sharp decline, market safety mechanisms were activated. Both the KOSPI and KOSDAQ markets triggered sell-side circuit breakers and a first-stage circuit breaker. This was the first time since June 8 that both markets activated circuit breakers simultaneously after 35 trading days.
- The drop was primarily driven by concerns in the semiconductor sector. Chinese memory semiconductor company Changxin Memory Technologies (CXMT) surged on its first day of trading on the Shanghai Stock Exchange, and news emerged that a Chinese firm had begun developing its own deep ultraviolet (DUV) lithography equipment, heightening fears about the competitiveness of China's semiconductor industry.
- Compounding the situation were negative developments from the U.S., which hit domestic semiconductor leaders hard. Samsung Electronics closed at 220,000 won, down 13.39%, marking its largest drop this year. SK Hynix also fell over 14%, finishing at 1,555,000 won.
- However, some analysts believe the market is overreacting. Han Ji-young, a researcher at Kiwoom Securities, stated, "The stock market's immunity has weakened significantly during this process of consecutive adjustments."

◆Major Reports
▷Signs of Volatility Easing Amid Market Decline [Daishin Securities]
- Despite the continued decline in stock indices, the KOSPI 200 Volatility Index (VKOSPI) fell from a peak of 97 on June 29 to 83 the previous day.
- Typically, a drop in indices is accompanied by increased demand for options to defend against downside risk, leading to rising implied volatility. However, this year, implied volatility, which had expanded during the market's rise, has actually decreased during the recent downturn. This indicates that the market's sensitivity to further declines has diminished compared to before, and concerns about increased volatility have largely been priced in.
- The absolute level of VKOSPI remains higher than usual. There are still fundamental uncertainties surrounding the performance outlook and valuations in the semiconductor sector.
- Nonetheless, the current high volatility should be distinguished from the inherent uncertainties of the semiconductor sector, as well as the amplified supply-demand volatility due to leverage and short-term concentration. Considering recent capital outflows and decreased trading, the influence of supply-demand volatility is gradually weakening.

◆Key Announcements After Market Close (July 28)
△Hanwha Systems reports Q2 operating profit of 103.7 billion won, up 218.8% year-on-year.
△BNK Investment Securities reports Q2 net profit of 36.3 billion won, up 116% year-on-year.
△HYBE reports Q2 operating profit of 170.9 billion won, a 159% increase year-on-year.
△SK D&D announces a 140 billion won rights offering for shareholders.
△L&F states that the sale of its own shares prior to negative disclosures was not for loss avoidance.

◆Fund Trends (as of July 27, excluding ETFs)
▷Domestic Equity: 1.1814 trillion won
▷Overseas Equity: 32.1 billion won

◆Today's Schedule (July 29)
▷Korean Earnings: SK Hynix, Samsung C&T, GS Engineering & Construction, HD Korea Shipbuilding & Offshore Engineering, HD Hyundai Heavy Industries, Hanwha Solutions, Korea Aerospace Industries, LG Household & Health Care, Hyundai AutoEver, Krafton

* This article has been translated by AI.