On June 5, iShares MSCI Korea ETF (EWY) fell 5.56% in pre-market trading to $192.41/share, with trading volume of $6.14 million. The decline directly mirrors the Korean KOSPI index, which plunged as much as 7% intraday before closing down 5.54%, marking one of the largest single-day drops this year.
The selloff was led by Samsung Electronics and SK Hynix, which fell over 7% and 9% respectively. KOSPI 200 futures hit the 5% decline threshold, triggering a circuit breaker that halted programmatic trading for five minutes. The two semiconductor giants account for 54% of KOSPI index weight and approximately three-quarters of the index's year-to-date gains, exposing severe market breadth deficiency.
Multiple factors converged to accelerate the downturn: Broadcom's revenue data slightly missed expectations, casting a shadow over the AI investment boom; newly launched single-stock leveraged ETFs linked to Samsung and SK Hynix amplified volatility through daily rebalancing mechanics; and Korean financial authorities issued warnings about excessive leveraged speculation, citing concerns over herd behavior. Margin lending has surged to a record 38 trillion won, while the Bank of Korea is expected to begin consecutive rate hikes as early as July.
The fund generally invests at least 80% of its assets in the component securities of a free float-adjusted market capitalization-weighted index designed to measure the performance of the large- and mid-cap equity market in Korea.
(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)
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