Korean Retail Investors Bought the Dip Yesterday and Sold at a Loss Today, Failing to Hold the Bag, Resulting in a Two-Day Loss of 53 Trillion KRW in Market Capitalization

BlockBeats News, July 29th - According to South Korean media reports, the South Korean stock market has experienced two consecutive days of sharp declines. On July 28th, driven by massive sell-offs from foreign investors, South Korean retail investors counterintuitively bought over 43 trillion Korean won to catch the falling knives. However, on the 29th, the market downturn further intensified, leading retail investors to panic sell. In the morning of the 29th, a net sell-off of 1.42 trillion Korean won was observed, indicating that the previous bargain hunters had started to exit to cut their losses.

As of the morning of the 29th local time, the KOSPI plummeted by over 12%, and the KOSDAQ dropped by over 8%, both triggering a circuit breaker for the first time in history. Samsung Electronics and SK Hynix suffered sharp declines for two consecutive days, with a combined market value evaporation of approximately 530 trillion Korean won. Samsung Electronics shrank by 257 trillion Korean won, while SK Hynix shrank by 273 trillion Korean won.

Citi estimates that leveraged ETFs held by South Korean retail investors have accumulated losses of around $38.7 billion (approximately 56.3 trillion Korean won). Meanwhile, the balance of margin loans held by South Korean investors has decreased by over 30 trillion Korean won from its peak. In July, the net purchases of US stocks by South Korean investors surged by about 5.7 times compared to the previous month, indicating that funds are rapidly flowing out of Korean stocks and shifting towards overseas markets.