KOSPI Struggles to Hold 7,000 as Bank of Korea Flags Record Volatility

South Korea's KOSPI dipped toward 6,920 early Thursday before recovering to 7,058.06, up 0.09% on the day. The swing came as the Bank of Korea (BOK) said the index's daily volatility this year is the widest of any major market.

The BOK measured daily volatility at 4.1%, roughly double Japan and Taiwan. Samsung Electronics, SK Hynix, Hyundai Motor and LG Energy Solution all traded lower earlier in the session as foreign investors sold a net 496.4 billion won of shares.

Semiconductor concentration drives the swings

The BOK's September credit report traced the KOSPI's plunge from above 9,200 to the 6,200 range last month to heavy semiconductor sector weighting. Samsung and SK Hynix make up 51.2% of the index and drove 69.3% of its decline in that selloff.

Two-times leveraged exchange-traded funds (ETFs) tied to the two chipmakers grew from $3.33 billion to $10.7 billion in a single month after their May listing, deputy governor Park Jong-woo said. Retail margin loans also hit a record before unwinding sharply during the correction.

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