The core factors that caused South Korean stocks to underperform among major global markets in the third quarter mainly revolve around three aspects. First, rising U.S. bond yields and pressure on the Korean won triggered capital outflows. Recently, U.S. Treasury yields rose again, and the expectation of the Federal Reserve maintaining high interest rates for an extended period has once again placed global risk assets under pressure for repricing.
Second, the retreat in AI-related trading directly triggered a "valuation storm" for South Korea's memory chip giants. As a bellwether for the global technology industry, the South Korean stock market is highly dependent on the semiconductor sector. However, during the third quarter, global markets began re-evaluating the return on investment in AI infrastructure. Samsung Electronics and SK Hynix, major weighted stocks, faced intense selling by overseas institutions from July to September.
Third, high leverage among domestic retail investors exacerbated the market's technical decline. South Korean regulators had previously issued multiple warnings about the unchecked growth of highly leveraged single-stock ETFs. As the market turned downward in the third quarter, a large number of active domestic retail investors faced significant margin call pressures, leading to frequent forced liquidations and margin calls in afternoon and late-session trading, amplifying the index's intraday declines and volatility from a technical standpoint. (rc)
