KOSPI Tops 6,600 on Buy Sidecar as Semiconductor Rally and ETF Reform Calls Intensify

The KOSPI broke through 6,600 and rose as high as 6,646 points as a buy sidecar was triggered. The KOSDAQ also overcame early weakness to turn positive, closing at 858 points. The won-dollar exchange rate held steady in the 1,415 won range, and foreign investors extended their net buying in the KOSPI market for a second straight session, purchasing roughly 1.4 trillion won intraday and buying nearly 70 billion won in the futures market as well. In the KOSDAQ, however, foreign investors were net sellers of about 90 billion won.

By the close, foreign net buying on the exchange had topped 2 trillion won, and the program selling seen early in the session reversed into non-arbitrage net buying led by Samsung Electronics and SK Hynix. Samsung Electronics and SK Hynix each gained more than 7%, SK Square rose nearly 10%, and LG Electronics surged 13%, lifting LG group stocks broadly. On the KOSDAQ, the number of advancing issues topped 800.

The hosts also voiced concern over large-cap semiconductor stocks driving the index higher without any clear single catalyst. Just as there are days when the market falls for no apparent reason, they noted, there are also days it surges without one — and warned that such asymmetric rallies could themselves feed a renewed rise in volatility.

The volatility index (KOSPI 200 Volatility Index) has fallen for six consecutive sessions, down roughly 26% on a weekly basis, and has plunged more than 10% intraday for three straight sessions as it stabilizes. Commentators noted that its recent spike to as high as 90 was unusual compared with the pandemic-era peak of 70, and suggested it could fall further into the 40s. Still, some cautioned that today's sharp rally could itself reignite volatility.

News that SK Hynix is pursuing a U.S. listing (IPO) sparked debate over its rationale. The hosts pointed out that SK Hynix is already generating substantial profit and has no pressing need to raise capital, making the reasoning behind a U.S. listing unclear. The planned offering size of roughly 5 trillion won is small relative to the company's earnings, they argued, leaving little incentive to proceed despite inviting market criticism.

The logic of using listing proceeds to fund shareholder returns drew particularly sharp criticism. Shareholders, the hosts said, do not want dividends funded by money raised from selling new stock, and such a move could put downward pressure on the share price. They also raised the possibility that the company is rushing to list before dual-listing regulations take effect in August 2027.

The hosts were also skeptical of the interpretation that listing a U.S. subsidiary would fall outside domestic dual-listing regulations. Since the subsidiary was acquired with SK Hynix's own capital, they argued, what matters is not the listing venue but the principle that the capital ultimately belongs to SK Hynix shareholders. As market suspicion grows, they called on SK Hynix to promptly and clearly explain its reasons for pursuing the IPO.

CoreWeave, an Nvidia GPU-based AI cloud infrastructure company, reported earnings that beat market expectations. Its backlog at the end of the second quarter reached $104.2 billion, up 240% year over year, and an additional $25 billion in contracts signed in early Q3 was not even included in that figure — underscoring substantial room for further growth. CoreWeave shares jumped more than 15% in after-hours trading following the report.

Super Micro Computer, an AI server hardware maker, also posted strong results, with revenue of $11.1 billion and adjusted EPS of $1.70, up more than 300% year over year. Gross margin improved 800 basis points year over year to 17.5%, and both guidance and next-quarter forecasts topped market expectations, sending shares up more than 8% after hours. The two companies' results were read as confirmation that the AI investment cycle is not slowing but in fact expanding.

Separately, reports emerged that Singapore's sovereign wealth fund Temasek is buying stakes in Samsung Electronics and SK Hynix. Temasek is known for long-term, direct equity investments with rare fund-manager turnover, meaning it tends not to sell easily once it invests. With AI-related holdings currently accounting for roughly 5-6% of its portfolio, the fund reportedly plans to roughly triple that share to 15%, with Samsung Electronics and SK Hynix seen as likely inclusions. This was viewed as a potential supply-demand positive, opening the door to a major foreign long-term investor that has so far been relatively passive toward the domestic market.

On valuation, Samsung Electronics' price-to-book ratio (PBR) stood at 4.1x as of yesterday's close, versus 3.5x for SK Hynix and 6x for U.S.-based Micron, suggesting domestic memory large-caps remain relatively undervalued. The hosts stressed that sustaining foreign long-term investor interest will require continued expansion of shareholder return policies alongside earnings growth.

Amid the second-quarter earnings season, brokerage firms posted standout profits. Mirae Asset Securities reported quarterly operating profit of 2.4 trillion won and net profit of 1.8 trillion won, beating market expectations by roughly 30% and becoming the first in the industry to post net profit above 1 trillion won for two consecutive quarters. Daishin Securities also reported net profit of 250 billion won, double market expectations, sending its shares up more than 6%.

Cosmetics stocks also rallied sharply alongside their earnings releases. Kolmar Korea's operating profit surged 50% year over year to 110 billion won, 16% above expectations, sending shares up roughly 25% and extending gains for a fifth straight session. Silicon2's second-quarter operating profit rose nearly 60% year over year to 83 billion won, 16% above expectations, lifting its shares more than 15%, while related names including Cosmax, Cosmecca Korea, Femtech Korea, and Chungdam Global all posted double-digit gains.

Market attention was focused on the U.S. July Consumer Price Index (CPI), due for release that evening. According to a Wall Street Journal survey, headline CPI was expected to rise 0.2% month over month and 3.4% year over year, while core CPI was expected to rise 0.2-0.3% month over month and roughly 2.5% year over year. Consensus was that a reading in line with expectations would likely be absorbed by the market without major disruption. Since much of the recent inflation pressure stems from oil prices and the transportation and food costs linked to them, continued stability in the Middle East could exert further downward pressure on prices going forward.

Still, it was noted as unusual that U.S. Treasury yields remain elevated regardless of the stable CPI outlook. The 30-year yield is near a 20-year high and the 10-year yield topped 4.7% intraday, with high rates persisting without any clear catalyst to bring them down. Bets on rising rates remain active while opposing positions are rare, raising concern that the market is excessively one-sided — a skew that could trigger unexpected volatility, such as a sharp yield drop, if sentiment suddenly reverses.

Concerns over prolonged high rates are also feeding into derivative effects such as rising gold prices, the hosts said, explaining that when inflation remains unchecked and confidence in monetary policy wavers, capital tends to flow into gold as a safe haven. They also raised concerns that big tech's massive data-center investment and corporate bond issuance could be delayed in such a rate environment, noting that Nvidia's CDS premium had risen before recently easing somewhat.

As the market stabilizes following nearly a month and a half of volatility triggered by regulation of single-stock 2x leveraged ETFs, the discussion has expanded to a deeper structural issue that predates the episode. Samsung Electronics accounts for roughly 33% of the KOSPI 200 and SK Hynix roughly 25%, with the two stocks combined making up about 60% of the index — meaning their moves trigger indiscriminate simultaneous trading not just in the index itself but across the many ETFs tracking the KOSPI 200.

Commentators noted that this level of concentration is unusual compared with major overseas indices. Japan's Nikkei 225 caps any single stock's weight at 10%, and the U.S. Nasdaq 100 caps it at 24%, with other major indices such as the Russell and MSCI applying similar ceilings. The Nasdaq 100 also imposes a dual cap, capping the combined weight of stocks exceeding 4.5% individual weight at no more than 48%, structurally preventing the volatility of individual stocks from shaking the entire index.

The hosts argued that domestic ETFs, including those tracking the KOSPI 200, need similar institutional safeguards — caps on individual stock weights and limits on the combined weight of top holdings. They also pointed to a further problem: because passive ETFs face severe penalties if their tracking error against the underlying index widens, they have no room for active management and are forced into indiscriminate selling when the index drops sharply. They called for reforms granting funds some degree of discretion, or active latitude. There was broad agreement that the leveraged ETF episode marks a moment to fundamentally reexamine the overall ETF system.

On brokerages' extraordinary earnings, the point was raised that heightened market volatility has itself become a source of brokerage profit — a result of investor anxiety and increased trading and margin lending — which should not be viewed purely positively. In particular, brokerages earned roughly 90 billion won in trading fees alone related to single-stock leveraged ETFs, while individual investors' cumulative losses over the same period are estimated at around 56 trillion won, a stark contrast between losses borne by the public from the market's collapse and the profits reaped by brokerages.

The gap in fees charged by different leveraged ETF managers also came under scrutiny. Samsung Asset Management charged the industry's highest management fee rate of 0.269%, earning 3.2 billion won in management revenue — 82% of the industry's total — while other asset managers, including Mirae Asset, charged only 0.07-0.08%, a structure that left them essentially near breakeven. It was argued that a social responsibility discussion is needed around a structure in which the dominant player with the greatest market power collects the highest fees while investors bear the losses.

Given that the brokerage industry operates under license and functions as infrastructure built on public trust, it was argued firms should invest more in their core roles — deepening research and information provision, strengthening loan underwriting, and expanding public investment education. Examples cited included the practice of extending margin loans against KOSDAQ stocks with no minimal supporting analysis, and it was emphasized that firms generating trillions of won in quarterly profit should invest commensurately in their social role.

Relatedly, news broke that the Supreme Court finalized a ruling ordering Samsung Securities to pay 1.8 billion won in damages to the National Pension Service over the 2018 'ghost stock' dividend error. In that incident, an employee's input error resulted in phantom shares exceeding the company's total issued shares being distributed and sold on the market with no system-level block, causing the stock to plunge roughly 10% that day. Strong criticism was directed at the eight years it took to reach a final ruling, and at the Supreme Court's reasoning — that holding the company fully liable would be 'harsh' — which cut the original damages award roughly in half. It was argued that reducing damages even for the National Pension Service, a wholly innocent victim, was unjust, and that fundamental reform is needed to address both judicial delays and a tendency for rulings to favor large corporations.