Korean Stocks Signal Market Rebound as Leveraged Liquidation Nears End, Retail Leverage Positioning at Three-Month Low

BlockBeats News, July 22nd, according to Bitget market data, the South Korean stock market surged on Wednesday, with the KOSPI index breaking through 7100 points, up over 5.6%. Samsung Electronics rose over 6%, and SK Hynix rose over 7%.

Prior to this, the leveraged liquidation pressure that drove the benchmark index to drop nearly 30% from its peak seems to be nearing its end. This rebound eased the pressure from weeks of selling, which had caused the Korean stock market to lose about $1.2 trillion in market value since its highs in June.

Morgan Stanley strategist Mixo Das stated that the deleveraging process of Korean leveraged ETF positions appears to be about 75% complete. According to data from the Korea Financial Investment Association, as of July 16th, Korean investors had reduced their leveraged stock positions to the lowest level in three months. The financing balance fell to 33.4 trillion Korean won ($26 billion), a 13% decrease from the peak at the end of June. For many investors, this is seen as a clear sign of a market turnaround.