Daily Woody | Jul 31, 2026 — Seoul's Record 17.91% Rebound, and the Rule That Landed With It
The KOSPI closed Friday at 6,595.45, up 1,001.89 points or 17.91%. It is the largest single-day gain in the index's history by both percentage and points. The previous percentage record, 11.95%, was set in October 2008.
Samsung Electronics rose 26.81% and SK Hynix gained 29.95% to close at its daily limit. SK Square and Samsung Electro-Mechanics also hit the limit. The KOSDAQ added 11.63%. A buy-side sidecar, which freezes program buy orders for five minutes, triggered six minutes after the opening bell on both markets.
Foreign investors bought a net 7.25 trillion won of Seoul-listed shares and institutions bought 1.15 trillion won. Retail investors sold 8.26 trillion won. The won strengthened 13.4 to 1,424.0 per dollar.
The trigger came from New York. Microsoft rose 15.51% on Thursday after reporting that Azure revenue growth had accelerated to 43% and that Azure had passed $100 billion in revenue for the first time. It was the largest single-day increase in market value by a US-listed company on record. Micron rose 18.36% and SanDisk 25.99% as the report eased doubts about returns on AI spending. Apple and Amazon reported after Thursday's close. Bloomberg reported that SK Hynix was also helped by a rare direct share purchase by SK Group chairman Chey Tae-won.
Friday was also the first day of tighter rules on single-stock leveraged ETFs. The minimum deposit to trade them rose from 10 million won to 30 million won. Asset managers also began spreading their rebalancing trades through the session rather than bunching them at the close.
Four closes tell this week: 6,023.66 on Tuesday, down 10.84%. 5,663.24 on Wednesday, down 5.98%, with circuit breakers halting both markets for a second straight day — the first time that had happened. 5,593.56 on Thursday. Then Friday's 6,595.45. Even after the largest one-day gain ever recorded here, the index closed out July well below where the month began; published estimates of the monthly decline range from about 22% to 25%.
Regulators have been circling the instrument behind those swings for two months. The Bank of Korea warned that the funds deepen concentration in the underlying stocks. The head of the Financial Supervisory Service said in June he regretted not blocking their launch. This week the finance minister convened an emergency market meeting. Authorities began examining whether foreign high-frequency traders amplified the moves, after program trading roughly doubled. Officials also drew up a cap limiting any investor to 20% of their portfolio in these products. The deposit rule that landed Friday is the first of those to take effect. It raises the cost of a new position and leaves the existing ones alone, so the next few sessions measure something narrower than they appear to.
Samsung Electronics reported second-quarter revenue of 171.5 trillion won and operating profit of 89.49 trillion won on Thursday, an increase of 1,813.8% from a year earlier. First-half operating profit reached 146.7 trillion won.
The Device Solutions division, which makes semiconductors, posted revenue of 127.5 trillion won and operating profit of 89.2 trillion won — a 70% operating margin, and 99.7% of the company's total. Memory set another quarterly record on AI server demand, and Samsung shipped its first HBM4E samples.
The Device Experience division, which sells phones, televisions and appliances, lost 800 billion won on revenue of 48 trillion won. Galaxy S26 sales lifted the top line 10% year on year while component costs took the margin.
South Korea's National Assembly passed a revision to the Criminal Procedure Act on Friday barring prosecutors from conducting investigations, including the supplementary inquiries they had retained. The opposition People Power Party filibustered from Thursday afternoon; the ruling Democratic Party ended debate by vote once the required 24 hours had passed, then carried the bill.
Prosecutors may now only request that police carry out further investigation. Police have one month to comply, extendable by another month. Where police decline to forward a case, complainants, victims and third-party referrers may all object.
A late addition to the bill widened the grounds on which courts may dismiss an indictment, including serious procedural violations and clear abuse of prosecutorial discretion. The opposition has asked President Lee Jae Myung to veto the bill. The Democratic Party will hold a public briefing on the new law on Monday.
China's official manufacturing PMI fell to 49.2 in July from 50.3 in June, the National Bureau of Statistics said Friday. That is below the 50 line separating growth from contraction, and short of the 50.0 median forecast in a Reuters poll. It is the first contraction since February.
Demand drove the drop. New orders fell to 48.5 from 51.2, the weakest since 2023, and new export orders slipped to 49.6. Production came in at 49.9. Outside manufacturing the readings were worse: construction hit a record low of 47.0, the non-manufacturing gauge fell to 49.0, its weakest since December 2022, and the composite reading dropped to 49.3.
A statistics bureau spokesperson attributed part of the weakness to typhoons that halted work at many sites in July. China's second-quarter GDP grew 4.3%, down from 5.0% in the first quarter and below the official annual target of 4.5% to 5%.
In June, Chinese exports to the United States rose 14% and total exports grew 27%, the fastest in five years, as firms shipped ahead of new Section 301 tariffs. July's 48.5 new-orders reading is what the order book looks like once that pull-forward is spent. Demand created to beat a deadline does not disappear when the deadline arrives; it is already gone by then.
Korea published its June industrial data the same morning, and the same mechanism sits inside it. Output rose 2.3%, the largest monthly gain in six years, with vehicle production up 15.4% — partly because carmakers shipped ahead of an excise-tax break that expired at the end of June. Two economies, two deadlines, one pattern. China reported the hangover today; Korea reports its July figures at the end of August.
The Bank of Japan kept its short-term policy rate at around 1% on Friday. Eight of nine board members voted to hold; one proposed raising the rate to 1.25%, citing the risk of faster inflation.
The bank raised the rate from 0.75% in June, pointing to Middle East tensions and oil prices. It said it would now watch how that increase moves through the economy while keeping its tightening bias intact.
Among the factors it will weigh before the next move, the bank listed currency markets alongside Middle East developments. The yen rose more than 2% intraday in New York on Thursday amid talk of official intervention, its sharpest move since April.
US Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer spoke with Chinese Vice Premier He Lifeng by video for more than an hour on Thursday. Bessent wrote that he pressed China to fully honour its commitments on rare earths and American farm goods. The two sides also discussed how the trade and investment committee agreed in May would operate.
Xinhua said China raised serious concerns about recent US economic and trade restrictions. Both readouts framed the call around implementing what the two presidents agreed in Beijing.
President Trump has said Xi Jinping will visit the United States on September 24; Beijing has not confirmed a date. Washington is separately working on measures to stop critical minerals in scrap batteries and electronic waste from leaving the country.
Industrial output rose 2.3% in June from May, the National Data Office said Friday, the biggest monthly increase since June 2020. Output had fallen in April and May.
Mining and manufacturing production climbed 6.4%. Vehicle output rose 15.4% as parts supply normalised after a March factory fire and as carmakers shipped ahead of the end of an excise-tax cut. Semiconductor output rose 4.5% after a 10.0% drop in May. Electronic components fell 10.4% and computers 4.9%.
Retail sales rose 2.7% and facility investment 5.8%, the first month since March in which all three measures rose together. The finance ministry noted that output still grew 0.9% across the second quarter as a whole.
Parliament on Thursday approved a special counsel to investigate the ballot-paper shortages and related failures at the June 3 local elections. Two lawmakers voted against. The counsel may run for up to 170 days and inherits a joint police-prosecution task force that has been working since June 9.
That task force began with the decision to cut the ballot-printing floor from 60% to 50% of registered voters. It then widened into the destruction of ballot storage boxes in Jamsil, an overseas trip by the former election commission chairman and his wife, and hiring irregularities.
Suspicions around the election management system, which the opposition pressed to include, are within the mandate. Parliament also extended its own inquiry committee by 30 days to the end of August, during which it will address a recount of ballots held at the Olympic Park polling station.
One set of allegations, three clocks. The task force hands its files to a special counsel, the parliamentary inquiry runs to the end of August, and a separate Comprehensive Special Counsel already investigating the former president faces its own deadline of August 23. Each body starts from a different point in the same record.
The method is what to watch. The opposition got the election-system allegations written into the mandate, and in exchange the inquiry extension and a recount date were agreed alongside. On the criminal-procedure bill the following day, the same party stayed out of the chamber entirely. Both outcomes came from the same parliament within twenty-four hours. Follow-up legislation on prosecution powers is due in August, and which of the two methods governs it will be visible within the first week.
Household lending at KB Kookmin, Shinhan, Hana, Woori and NH NongHyup stood at 778.79 trillion won as of Thursday, up 4.30 trillion won or 0.6% from the end of June.
Mortgages accounted for more than 3 trillion won of the increase and unsecured personal loans for over 1 trillion won, though the pace of unsecured lending eased from earlier in the month.
Through July the banks cut mortgage ceilings, closed online application channels and shut off loan brokers. Regulators are holding to overall volume targets while considering targeted support for first-time buyers, young households and newlyweds.
Heat and tropical nights continue across most of the country. Central regions see periodic cloud through Saturday while the south and Jeju stay mostly clear; skies clear nationwide from Sunday morning. No rain is forecast.
| Fri 31 | Sat 1 | Sun 2 | Mon 3 | |
|---|---|---|---|---|
| Conditions | Cloud in centre | Cloud in centre | Clearing | Mostly clear |
| Low | 20.1–28.6℃ | 21–27℃ | 21–27℃ | 23–27℃ |
| High | 32–39℃ | 32–38℃ | 32–38℃ | 31–38℃ |
Advisory: Highs reach 39℃ in places, with the east coast of Gangwon near 37℃. Overnight lows stay above 25℃, so heat illness remains a risk. Seas are calm, with waves of 0.5 to 1.0 metres off the west and south coasts.
A market that moves 1,001 points in a day is describing its own plumbing.
Korea's index rose 1,001 points on Friday after Microsoft's shares jumped 15.51% in New York overnight. It had fallen for three sessions before that as a Chinese memory maker's market debut brought competition into closer view. Both moves were reasonable. Neither explains a 10.84% fall on Tuesday followed by a 17.91% rise on Friday.
What sits between the news and the price is the machinery. Two companies make up more than half of this index. Since late May, funds promising twice the daily move of exactly those two companies have had to buy into every rally and sell into every fall before the close. The Bank of Korea flagged the effect. The financial regulator said he wished he had blocked the products. This week the finance minister called an emergency meeting.
The first corrective measure took effect on Friday, and the index promptly set a record. The rule raises the price of entry and leaves the open positions alone, so one session says little about it either way. What the session does say is that the machinery outlives the news running through it.
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