KOSPI Swings 8% Both Ways as Fear Gauge Hits Record High

*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "AI-based personalized news recommendation and summarization service" developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.

1. Fear Gauge Hits Record High as KOSPI Rebounds 8% After 8% Plunge

- Key Summary: The KOSPI closed at 8,096.93, up 612.52 points (8.18%) from the previous session, with Samsung Electronics (005930) and SK hynix rebounding 8.97% and 15.91% respectively to lead the index recovery. However, the VKOSPI, Korea's fear gauge, recorded 91.23, surpassing the 89.30 level seen during the 2008 financial crisis to reach a record high. Foreign investors sold off 2.0035 trillion won worth of shares, extending their net selling streak to 22 consecutive trading days, and historically, the KOSPI's average rate of change 30 trading days after a plunge of more than 8% was 7.39%. IBK Securities said the corrective trend could continue until variables such as U.S. inflation data, the FOMC, and the Iran situation are confirmed.

2. Margin Calls Reach 300 Billion Won in Two Days as 'Forced Liquidation' Warning Light Flashes

- Key Summary: Over the two days of the KOSPI's plunge, the scale of forced selling reached 166.1 billion won on Friday and 139.1 billion won on Monday, totaling 305.2 billion won, with the cumulative June total exceeding 379.6 billion won. The balance of credit loans stood at 37.7904 trillion won as of Monday, maintaining a high level after first surpassing 38 trillion won last month. Securities firms explain that, given the short settlement period characteristic of margin transactions, it is worth noting that forced selling is highly likely to follow immediately when stock prices plunge. Analysts say that if volatile trading continues while the scale of leveraged buying does not decrease, additional forced liquidation pressure could grow.

3. Bank of Japan Expected to Raise Benchmark Rate from 0.75% to 1.0% Next Week, Highest in 31 Years

- Key Summary: According to the Nikkei, the BOJ is expected to raise its rate from 0.75% to 1.0% at its meeting on the 15th and 16th, reaching its highest level in 31 years since 1995. With Japan's CPI expanding to 2.8% in April from 2.5% in March, a sense of caution is spreading within the BOJ that a larger hike would be inevitable if the timing of the response is missed. The BOJ is also considering a plan to halt the reduction of its government bond purchases from April 2027, maintaining a monthly level of around 2.1 trillion yen. With the possibility of yen appreciation and concerns over the unwinding of the yen carry trade emerging simultaneously, analysts say caution is needed regarding the impact of the BOJ meeting results on domestic foreign investor flows.

4. SpaceX Sells Out Whenever It Appears…Calm Before the Storm in KOSPI Ahead of 'Main Body' Arrival

- Key Summary: A 500 million dollar domestic subscription for SpaceX through Mirae Asset Securities (006800) sold out within one to two minutes, and aggressive portfolio rebalancing by foreign institutions is being cited as one of the causes of the KOSPI's plunge. While additional capital concentration into related aerospace ETFs is expected after the listing, SpaceX-related stocks are already showing a downward trend on concerns of catalyst exhaustion (Mirae Asset Venture Investment down 30.56% over the past month). According to Daishin Securities (003540) analysis, in four of five past major IPOs, the KOSPI was weak before listing, and in four of five cases rose an average of 3% during the 20 trading days after listing. Given that SpaceX emphasizes an "AI comprehensive portfolio" encompassing AI infrastructure and semiconductor businesses, some in the securities industry are raising the possibility of capital returning to AI-leading stocks such as semiconductors after the listing.

5. U.S. Draws Its Sword Again…Adds BYD, CATL, Unitree to 'Blacklist'

- Key Summary: The U.S. Department of Defense added 188 Chinese companies, including Alibaba, Baidu, Tencent, and BYD, to its list of "companies supporting the Chinese military," with direct contracts to be banned from the end of this month and transactions through third parties to be blocked starting next year, Reuters reported. Given that Chinese semiconductor companies such as YMTC and CXMT were re-listed, some interpret that the scope of controls against China has expanded from a past focus on state-owned defense and telecommunications companies to a broad range of commercial technology companies including AI, electric vehicles, robotics, batteries, and semiconductors. As this hardline measure came just three weeks after the conclusion of the U.S.-China summit, concerns over a reignition of U.S.-China conflict are growing, and China is responding with its "unreliable entity list." Analysts say a review is needed of whether domestic companies linked to Chinese technology supply chains are exposed to risk.

6. Samsung Electro-Mechanics (009150) Reclaims No. 4 in KOSPI Market Cap, Closing Up 18% Amid Sharp Market Rebound

- Key Summary: Samsung Electro-Mechanics closed at 1.97 million won, surging 18.38%, with a market cap of 147.1466 trillion won to overtake Hyundai Motor and reclaim No. 4 in the KOSPI. Having risen nearly six-fold from the 200,000 won range at the start of the year to the recent 1.9 million won range, Samsung Electro-Mechanics is regarded as a leading AI component stock that simultaneously supplies MLCCs and FC-BGAs for AI data centers. iM Securities raised its target price from 1.8 million won to 2.3 million won, while Meritz Securities also presented a target price of 2.1 million won, classifying MLCCs as a "strategic asset" of the AI era. iM Securities estimated operating profit for 2027 and 2028 at 3.3 trillion won and 4.3 trillion won respectively, and presented an analysis that the likelihood of further upward earnings revisions is high.