# SK Hynix surges 25% in a single day
A streak of consecutive sell-offs has sparked an epic rebound in the Korean stock market—there’s only one thing you need to do: never chase the rally!
On July 31, the Korean stock market is destined to be written into the global capital markets history. The Korea Composite Index (KOSPI) surged 17.91% on the day, posting the largest single-day gain in history. During the session, circuit breakers were triggered twice. SK Hynix hit the 30% daily limit-up, Samsung Electronics jumped nearly 27%, and the two major AI memory leaders both refreshed their records for the largest single-day gain ever. After a deep pullback totaling 22.4% over the past month and a collapse with a drawdown of more than 30% from the June peak, this epic reversal—from “panic stampede” to “violent celebration”—is by no means an accidental emotional rebound. It is the result of multiple forces resonating at the same point in time.
I. Valuation floor after the plunge: rebound fueled by extreme fear
The early decline in the Korean stock market this time was, in essence, an overreaction driven by worries about a global AI tech stock bubble. Over the past three trading days, KOSPI kept falling sharply, and market sentiment briefly sank into peak panic. A large amount of capital fled regardless of cost, with the semiconductor sector hit first—SK Hynix’s share price was essentially “cut in half.” Such an extreme sell-off in the short term has completely detached from the real support of company fundamentals, and sector valuations were mispriced down into a highly attractive range. At this point, long-term large funds represented by hedge funds and pension funds began buying on the dip against the trend. Overseas asset management firms also completed large-share turnover at the “halving” point in SK Hynix’s price. The selling pressure, stretched across continuous sell-offs, was fully released. The index itself had already built up very strong technical rebound momentum—waiting only for a clear signal to ignite bullish sentiment.
II. Key catalysts: dual support from industry signals and management endorsement
The most direct spark for this surge comes from a double stack of positive news at both the industry and corporate levels. On the one hand, rumors of tens of billions of dollars in cooperation between Nvidia and Korea’s two leading memory-chip giants have continued to build, alongside the earlier announced second-quarter earnings release window. The market has strong expectations for SK Hynix’s results. Top brokerage research notes have already begun raising the consensus for operating profit in the 2027 Korean stock semiconductor sector. The resilience of demand for AI memory has been reaffirmed by leading institutions. Alphabet’s earnings report also validates the high level of global AI capital expenditure, helping the market realize that earlier concerns about an “AI bubble burst” were completely overreacted to. On the other hand, SK Group chairman Choi Tae-won for the first time directly bought 3,620 shares of SK Hynix under his personal name, with total investment close to 5 billion Korean won. This move sent a clear signal of “responsible operations” to the market, breaking investors’ concerns about insufficient confidence in corporate management. At the moment when the stock price was close to collapse, it injected extremely strong confidence into the market. When SK Hynix’s share price approached the daily limit-up on the day, Choi Tae-won’s intraday unrealized gains were close to 1.2 billion Korean won, further amplifying the demonstration effect of management support and prompting a large amount of retail capital to follow the trend.
III. A subtle balance from regulators: not crackdowns, but “insurance” for the rally
Many people overlooked the regulatory policy that was implemented in parallel that day—Korea’s financial regulators raised the minimum cash deposit requirement for leveraged ETFs from 10 million Korean won to 30 million Korean won. While it appears to increase the threshold for leverage, in reality it is a protective adjustment under extreme market conditions. It directly filters out a large amount of small, highly low-risk-resilience leveraged speculative capital, preventing a subsequent extreme two-way stampede where “rallies also use leverage, and declines also use leverage.” This helps avoid the market experiencing another disorderly plunge like the one before. Instead of issuing a cooldown policy at the moment of the surge, regulators stabilized market structure by optimizing leverage rules. In essence, it is using institutional design to safeguard this round of rebound—shifting the rally from pure speculation forcing short squeezes toward a repair-style rebound with fundamental support.
IV. Outlook: after the rebound, differentiation is inevitable
In the short term, after a one-day surge of 17%, both KOSPI and SK Hynix have accumulated a large volume of short-term profit-taking. The next phase will most likely enter a consolidation and digestion period, with a low chance of directly replicating today’s extreme upside move. The market’s next key battleground points will fully focus on two critical variables soon to be realized: first, whether SK Hynix’s upcoming Q2 earnings can deliver results that exceed expectations; second, whether global cloud vendors’ AI capital expenditure guidance can keep maintaining high growth rates. If subsequent earnings and industry data can confirm the current valuation-repair logic, SK Hynix—still the core leader in global AI high-bandwidth memory—retains further upside potential and can help the semiconductor sector come out of its repair phase. But if performance falls short of expectations, today’s surge may become the peak of a “panic rebound,” and smaller-cap stocks that were previously mispriced down could face sell pressure again. Overall, this round of reversal in the Korean stock market—from “collapse” to “celebration”—is essentially a return of extreme sentiment back to fundamentals. Going forward, the market will fully move away from the earlier bipolar frenzy of “one-way blowout up, one-way crash down,” gradually returning to a normal pricing track centered on the health of the AI industry. What investors need to watch out for—precisely after today’s surge—is falling into another extreme again: “ignoring risk, blindly chasing gains.”
A streak of consecutive sell-offs has sparked an epic rebound in the Korean stock market—there’s only one thing you need to do: never chase the rally!
On July 31, the Korean stock market is destined to be written into the global capital markets history. The Korea Composite Index (KOSPI) surged 17.91% on the day, posting the largest single-day gain in history. During the session, circuit breakers were triggered twice. SK Hynix hit the 30% daily limit-up, Samsung Electronics jumped nearly 27%, and the two major AI memory leaders both refreshed their records for the largest single-day gain ever. After a deep pullback totaling 22.4% over the past month and a collapse with a drawdown of more than 30% from the June peak, this epic reversal—from “panic stampede” to “violent celebration”—is by no means an accidental emotional rebound. It is the result of multiple forces resonating at the same point in time.
I. Valuation floor after the plunge: rebound fueled by extreme fear
The early decline in the Korean stock market this time was, in essence, an overreaction driven by worries about a global AI tech stock bubble. Over the past three trading days, KOSPI kept falling sharply, and market sentiment briefly sank into peak panic. A large amount of capital fled regardless of cost, with the semiconductor sector hit first—SK Hynix’s share price was essentially “cut in half.” Such an extreme sell-off in the short term has completely detached from the real support of company fundamentals, and sector valuations were mispriced down into a highly attractive range. At this point, long-term large funds represented by hedge funds and pension funds began buying on the dip against the trend. Overseas asset management firms also completed large-share turnover at the “halving” point in SK Hynix’s price. The selling pressure, stretched across continuous sell-offs, was fully released. The index itself had already built up very strong technical rebound momentum—waiting only for a clear signal to ignite bullish sentiment.
II. Key catalysts: dual support from industry signals and management endorsement
The most direct spark for this surge comes from a double stack of positive news at both the industry and corporate levels. On the one hand, rumors of tens of billions of dollars in cooperation between Nvidia and Korea’s two leading memory-chip giants have continued to build, alongside the earlier announced second-quarter earnings release window. The market has strong expectations for SK Hynix’s results. Top brokerage research notes have already begun raising the consensus for operating profit in the 2027 Korean stock semiconductor sector. The resilience of demand for AI memory has been reaffirmed by leading institutions. Alphabet’s earnings report also validates the high level of global AI capital expenditure, helping the market realize that earlier concerns about an “AI bubble burst” were completely overreacted to. On the other hand, SK Group chairman Choi Tae-won for the first time directly bought 3,620 shares of SK Hynix under his personal name, with total investment close to 5 billion Korean won. This move sent a clear signal of “responsible operations” to the market, breaking investors’ concerns about insufficient confidence in corporate management. At the moment when the stock price was close to collapse, it injected extremely strong confidence into the market. When SK Hynix’s share price approached the daily limit-up on the day, Choi Tae-won’s intraday unrealized gains were close to 1.2 billion Korean won, further amplifying the demonstration effect of management support and prompting a large amount of retail capital to follow the trend.
III. A subtle balance from regulators: not crackdowns, but “insurance” for the rally
Many people overlooked the regulatory policy that was implemented in parallel that day—Korea’s financial regulators raised the minimum cash deposit requirement for leveraged ETFs from 10 million Korean won to 30 million Korean won. While it appears to increase the threshold for leverage, in reality it is a protective adjustment under extreme market conditions. It directly filters out a large amount of small, highly low-risk-resilience leveraged speculative capital, preventing a subsequent extreme two-way stampede where “rallies also use leverage, and declines also use leverage.” This helps avoid the market experiencing another disorderly plunge like the one before. Instead of issuing a cooldown policy at the moment of the surge, regulators stabilized market structure by optimizing leverage rules. In essence, it is using institutional design to safeguard this round of rebound—shifting the rally from pure speculation forcing short squeezes toward a repair-style rebound with fundamental support.
IV. Outlook: after the rebound, differentiation is inevitable
In the short term, after a one-day surge of 17%, both KOSPI and SK Hynix have accumulated a large volume of short-term profit-taking. The next phase will most likely enter a consolidation and digestion period, with a low chance of directly replicating today’s extreme upside move. The market’s next key battleground points will fully focus on two critical variables soon to be realized: first, whether SK Hynix’s upcoming Q2 earnings can deliver results that exceed expectations; second, whether global cloud vendors’ AI capital expenditure guidance can keep maintaining high growth rates. If subsequent earnings and industry data can confirm the current valuation-repair logic, SK Hynix—still the core leader in global AI high-bandwidth memory—retains further upside potential and can help the semiconductor sector come out of its repair phase. But if performance falls short of expectations, today’s surge may become the peak of a “panic rebound,” and smaller-cap stocks that were previously mispriced down could face sell pressure again. Overall, this round of reversal in the Korean stock market—from “collapse” to “celebration”—is essentially a return of extreme sentiment back to fundamentals. Going forward, the market will fully move away from the earlier bipolar frenzy of “one-way blowout up, one-way crash down,” gradually returning to a normal pricing track centered on the health of the AI industry. What investors need to watch out for—precisely after today’s surge—is falling into another extreme again: “ignoring risk, blindly chasing gains.”
