Speculative fever grips Kosdaq amid record rally
The Kosdaq has risen about 19 percent this month, the best performance among major global equity indexes. But some of the speculative trading that had fueled volatility in the KOSPI has migrated to the junior bourse, leaving the smaller-cap market prone to sharper swings, market watchers said Wednesday. The index hit a year-to-date high of 1,226.18 on April 27 before sliding from May, according…
The Kosdaq, a smaller-cap market, has experienced a significant rise of around 19 percent this month, marking the best performance among major global equity indexes. However, this speculative trading that fueled volatility in the KOSPI has now moved to the Kosdaq, leaving the index vulnerable to sharper swings, according to market observers.
On April 27, the index reached a yearly high of 1,226.18, but it has since declined, hitting a three-month low of 644.78 on July 30 before rebounding to the 850 level. As of Wednesday, the Kosdaq closed at 858.91, up 0.12 percent from the previous session.
The resurgence of the Kosdaq can be attributed to a few factors. First, enthusiasm for semiconductor stocks has cooled, leading to a decrease in trading activity in the benchmark KOSPI. Additionally, tighter restrictions on single-stock leveraged exchange-traded funds (ETFs) have dampened overall trading. However, bargain hunting following the Kosdaq's steep decline has also played a role in driving the recent rebound.
The shift in speculative capital has redirected attention towards the Kosdaq, with retail investors rapidly adjusting their positions. In the past week, there have been four instances of buy-side trading curbs triggered.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
