South Korea's KOSPI Volatility Surges as Investor Deposits Hit 5-Month Low on July 14

According to the Financial Investment Association of Korea, investor deposits declined to 111.28 trillion won as of July 14, marking the lowest level since February, as South Korea's stock market experienced record-breaking volatility in July. Investor confidence weakened alongside a decline in margin trading loans to 34.71 trillion won, reflecting diminished buying appetite.

Single-stock leveraged ETFs tracking Samsung Electronics and SK Hynix have become the primary driver of market turbulence. As these products fell more than 30% in a single day, asset managers were forced to sell underlying assets to maintain target leverage ratios, triggering a vicious cycle of price declines and forced selling. The combined trading volume of these two stocks and their related leveraged and inverse products accounted for nearly 50% of total market turnover, according to Goldman Sachs analysis, amplifying intraday volatility across KOSPI.