3 KOSDAQ Stocks Surge Over 50% as KOSPI Slumps, AI Stocks Sink

HLB, SPG, and Peptron have each surged more than 50% over the past month on the KOSDAQ, South Korea's secondary stock exchange for small and mid-cap firms. The rally comes even as the KOSPI, Korea's main index, struggles to recover from a historic crash.

Regulators tightened rules on leveraged exchange-traded funds (ETFs) in late July, and a global AI-driven selloff hit chipmakers. Both forces pulled money out of KOSPI heavyweights and into smaller KOSDAQ names.

KOSPI's Rough Month

The KOSPI fell 22% in July, one of its largest monthly drops on record, after tumbling as much as 34% from a July 22 record high before a nearly 18% single-day rally on the final trading day cut the losses.

Regulators blamed single-stock leveraged ETFs tracking Samsung Electronics and SK Hynix for the swings. They raised the minimum cash deposit for trading those products from 10 million won to 30 million won.

Trading in the affected ETFs has since collapsed by as much as 93%. However, the KOSDAQ small-cap rally followed instead of a calmer market. The KOSDAQ notched five straight gaining sessions through August 6, even as the KOSPI kept swinging.

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