Key points
- Individual investors sold a net 1.43 trillion won ($995M USD) of Kospi shares on July 30. Foreign investors bought 1.35 trillion won ($936M USD), their first buying in five sessions.
- The Kospi rose as much as 5.54% intraday on Samsung's earnings, then closed down 1.23% at 5,593.56.
- Forced liquidations at brokerages rose from 13.89 billion won ($9.7M USD) on July 28 to 61.13 billion won ($42.5M USD) on July 29, an increase of 340%.
- HSBC says only 2% of margin accounts have been liquidated so far, so the borrowed money behind the selling is still mostly in place.
On Thursday, July 30, the Kospi closed at 5,593.56, down 69.68 points or 1.23 percent. It had been up as much as 5.54 percent earlier in the day, at 5,976.82, after Samsung Electronics reported the best quarter in its history. The Kosdaq closed down 2.70 percent at 644.78.
The number that mattered more that day was the one showing who bought and who sold. Foreign investors bought a net 1.35 trillion won ($936 million USD) of Kospi shares, their first day of buying after four straight sessions of selling. Institutions added 66.3 billion won ($46 million USD). Individual investors sold 1.43 trillion won ($995 million USD), almost exactly what the other two sides took.
That's the reverse of how most of July went. Through the worst of the crash, Korean individual investors were the ones absorbing everything foreign funds let go. On July 28, when the Kospi fell 10.84 percent, they bought while foreigners sold. Their own selling started on July 29, when they let go of 1.97 trillion won ($1.37 billion USD) as the market halted for a second straight day. Thursday was the second day of it.
Some of that selling came from the brokerages themselves. When a stock bought with borrowed money falls far enough, the brokerage sells the position to recover its loan. Those forced sales came to 13.89 billion won ($9.7 million USD) on July 28. The next day, after the 10.84 percent fall, they came to 61.13 billion won ($42.5 million USD), an increase of 340 percent in one day. The wreaths delivered to the National Assembly that same day were about this.
There's still a lot of borrowed money sitting behind those positions. Margin loans across both markets stood at 32.995 trillion won ($23.0 billion USD) on July 29, close to the 35.94 trillion won ($25.0 billion USD) daily average from April through June. Two weeks of falling prices and forced sales have barely reduced the total. HSBC put it plainly in a note cited by Hankook Ilbo, saying the accounts liquidated in July came to only 2 percent of the total, so most of the borrowed positions are still open. The bank also pointed at the single stock leveraged funds as a second source of forced selling still to come, and the cash deposit rule meant to slow those funds down only takes effect on July 31.
Daishin Securities gave Financial News an end date for the forced selling, with a warning attached to it. "What is likely to finish in early to mid August is the disorderly forced selling phase," the firm said. "That does not mean the index low. The bottom can only be confirmed once the global repricing of semiconductors stops as well."
Lee Kyung-min, head of FICC research at Daishin Securities, said the chip sector is still what's moving the market. "Volatility in semiconductor supply and demand hasn't settled yet," he said, noting that the leveraged funds were again among the most heavily traded products on the day.
The chips did most of the damage on Thursday. SK Hynix's Seoul shares fell 5.64 percent, Samsung Electro-Mechanics fell 14.58 percent and SK Square fell 6.00 percent. Samsung Electronics closed down 0.72 percent. The semiconductor sector index fell 3.08 percent.
Meanwhile, parts of the market finished green. Defense and shipbuilding stocks rose, Samsung SDI closed up 6.49 percent and KB Financial up 4.56 percent. Investors who sold their chip shares moved some of that money into other Korean stocks and didn't take it out of the market.
Won figures are converted at 1,437 won to the dollar, the July 30, 2026 rate.
