KOSPI rout deepens retail losses, fuels forced selling fears

Korean stock prices have plummeted over 7 percent on Thursday, following a 5 percent drop just two days prior. The decline has been particularly severe for chip companies Samsung Electronics and SK hynix. As investors struggle, many have found themselves with paper losses instead of profits. Concerns are mounting as some feel they have missed their opportunity to sell and are now grappling with whether to cut their losses or wait for a potential market rebound.

Frustration and waning confidence in Korean equities are driving this unease. One investor shared their frustration on an online stock forum, stating they no longer know the market's direction and have stopped trying to lower their average purchase price by buying additional shares. Those who have invested using borrowed funds face mounting stress about repaying their loans.

The total amount of margin loans used to purchase stocks has reached an all-time high, surpassing 34 trillion won for the first time in three months since July. This amount, reported by the Korea Financial Investment Association, stood at 34.25 trillion won as of Tuesday. While borrowing to invest can magnify returns in a rising market, it also poses significant risks when markets decline.