Stock Track | CSOP SK Hynix (2x) Leveraged Product Plummets 21.71% Intraday Amid South Korean Market Sell-Off and Rate Hike

Stock Track07-16 09:37

The CSOP SK Hynix Daily (2x) Leveraged Product experienced a sharp decline of 21.71% during intraday trading on Thursday, significantly underperforming the broader market.

The sell-off followed a substantial downturn in the South Korean stock market at the open, which prompted the Korea Exchange to initiate a temporary trading halt mechanism for the KOSPI index. The leveraged ETF's underlying asset, SK Hynix shares, dropped over 10%, contributing to the amplified loss due to the product's 2x leverage structure. This weakness extended from overnight declines in U.S. memory chip stocks, where SK Hynix shares fell over 9%.

Further pressure came from monetary policy tightening, as the Bank of Korea announced its first interest rate increase in over three years, raising the benchmark rate by 25 basis points to 2.75%. Additionally, regulatory concerns surrounding leveraged exchange-traded funds intensified, with South Korean authorities directing financial regulators to address the issue and prepare follow-up measures.

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