Following a drop of 8% on the previous day (7th) which triggered a circuit breaker, the Korean stock market continued to fluctuate sharply today (8th). After opening 203 points lower, it briefly reversed to gain 135 points or 1.8%, hitting a high of 7,791 points before encountering selling pressure. It closed at 7,246 points, falling 409 points or 5.35%; compared to its historical high, it has accumulated a drop of over 20%, technically entering a bear market. The Korea Exchange triggered the KOSPI's circuit breaker mechanism for the second consecutive day due to a 5% decline in KOSPI 200 futures, and program selling was suspended for 5 minutes. According to reports, the Financial Supervisory Service (FSS) is currently studying specific measures to tighten investment thresholds for single-stock leveraged ETFs. It is understood that potential intervention measures include limiting the number of issuances, setting size caps, and raising retail investor thresholds. Related content: Major bank JPMorgan raises SK Hynix (000660.KS) target price to 1.8 million won, rating 'overweight'. South Korea's Finance Minister today urgently summoned the central bank and regulatory agencies for a meeting, directly pointing out that the high concentration of the semiconductor sector is amplifying market volatility. Regulators are also eyeing the rapidly expanding single-stock leveraged ETFs, warning that they are becoming a driver of this round of sharp fluctuations. Foreign reports said that South Korean Finance Minister Ju Yunzhe said in a statement after the meeting that foreign and institutional investors' profit-taking, portfolio rebalancing, and changes in global AI sector expectations jointly pushed up market volatility. The statement directly named the concentration issue in the semiconductor sector, stating "the rise in semiconductor sector concentration has become a driver of market volatility, and the impact of chip sector fluctuations on the overall stock market is intensifying." The FSS on Tuesday said it will monitor the impact of single-stock leveraged ETFs linked to chip stocks on the market and, if necessary, review the marketing practices of asset management companies. The Bank of Korea warned last Sunday (5th) that single-stock leveraged ETFs may amplify one-sided trading, exacerbate concentration in specific stocks, and increase market volatility, and said it would coordinate with relevant agencies to address related risks. (da/u)

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Reportedly, South Korean regulators are considering tightening investment thresholds for individual stock leveraged ETFs, which may include limiting the number and scale of issuances, raising retail investor thresholds, etc.

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