South Korea's KOSPI Index Surges 5.76% on July 3 as Single-Stock Leverage ETFs Drive Market Volatility

According to Korea Exchange, on July 3, KOSPI index surged 440.25 points (5.76%) to 8,088.34, with intraday range reaching 758.18 points. Samsung Electronics rose 8.22% and SK Hynix jumped 10.88%, while individual and foreign investors sold combined 4.29 trillion Korean won.

Single-stock leverage ETF products, which track Samsung Electronics and SK Hynix, drove the volatility. In June, these 14 leverage products generated 212 trillion won in trading volume, representing 27% of total ETF market turnover. The SK Hynix 2x leverage ETF topped the list with 84.3 trillion won in monthly trades, though its 10.9% return lagged the underlying stock's 12.1% gain due to accumulated volatility. Market analysts attribute the swings to rebalancing mechanics inherent in leverage structures and market makers' hedging activities across spot, ETF, and derivatives markets.