Samsung's Bullish Call Sparked a 5.5% Rally—Kospi Erased It All

Samsung Electronics just told investors that the memory chip shortage will get worse in 2027 and stretch into 2028 — and for about two hours, the Kospi loved it. Then it didn't. South Korea's benchmark index swung from a session low of more than 2% down to a gain of as much as 5.5%, before collapsing again to close down 1.23% at 5,593.56, breaking below the psychologically important 5,600 level.

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What happened

Samsung's earnings call kicked off around 10 a.m. local time on July 30, and the market reaction was immediate. Jaejune Kim, an executive in Samsung's memory business, told analysts the supply shortage expected in 2027 will be worse than this year's and will persist into 2028, as AI-driven demand for HBM and DRAM keeps outstripping capacity. Samsung also disclosed it has locked in multi-year supply agreements with its top five global data center customers and is nearing deals with five more.

The numbers behind the call were striking: Samsung's chip division posted a more than 250-fold jump in profit for the quarter. Samsung shares spiked as much as 8.39% intraday on the news, dragging the broader index up with them and pulling SK Hynix out of its own losses. But the rally didn't hold. By the close, Samsung had reversed to finish down 0.72%, and SK Hynix dropped 5.6% — now down roughly 27% over just three trading days.

Why it matters: the rally that didn't stick

This is the same setup I flagged in Samsung's 2027 Shortage Warning Sparks Kospi's Sharpest Rebound — bullish supply-shortage commentary triggering a sharp bounce. The difference today is that the bounce evaporated by the close. Foreign outlets pointed to leveraged ETF rebalancing as the mechanical amplifier: because SK Hynix and Samsung carry such heavy weight in the Kospi, leveraged ETF products tracking them run daily rebalancing trades that magnify moves in both directions — turning a Samsung-driven rally into an equally violent afternoon reversal.

The damage to leveraged ETF holders has been severe. Citi estimates domestic retail investors in leveraged ETFs have lost roughly $38.7 billion (about 56.3 trillion won) so far. SK Hynix-linked leveraged ETFs alone have shed about $17 billion (24.7 trillion won) in market cap from their peak — the single largest decline of any product. Money Today reported one retail trader whose paper gains, once above 600 million won, flipped into a cumulative loss of 700 million won this week alone.

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Who's affected

• Samsung Electronics — delivered the bullish supply outlook and a blowout chip profit number, yet still closed lower on the day, underscoring how disconnected sentiment has become from fundamentals.
• SK Hynix — took the heaviest hit, falling 5.6% and extending a three-day slide of about 27%, exactly the kind of drawdown I discussed in Mirae Asset Slashes Samsung, SK Hynix Targets 33%—Still Says Buy.
• Leveraged ETF holders — retail investors piling into 2x long products on both names have absorbed tens of billions of dollars in losses as daily rebalancing turns volatility into a wealth-destruction machine.
• The broader Kospi — this marks a third straight session of losses, though the magnitude of decline eased versus the two prior sessions, which followed the pattern I covered in Kospi Falls Below 6,000 as Retail Investors Give Up the Dip-Buy.

What to watch next

South Korean regulators are already responding. Finance Minister Koo Yun Cheol hosted an emergency meeting with the country's top financial authorities on July 29, and the government announced fresh curbs on leveraged ETFs late that night aimed at limiting retail access and cooling the rebalancing-driven volatility. Those measures were in effect for Thursday's session and clearly weren't enough to stop the reversal — worth watching whether authorities tighten further if the whipsaw pattern repeats.

Also worth tracking: whether SK Hynix stabilizes after its three-day slide, whether Samsung's long-term supply deal disclosures translate into analyst estimate revisions, and whether the leveraged ETF outflows accelerate as retail investors who are already deep in losses decide to cut their positions rather than average down further.

This is not financial advice — always do your own research before making investment decisions.

The takeaway

Samsung delivered exactly the bullish supply narrative the market wanted to hear, and for a few hours the Kospi believed it. But the session's real story isn't the earnings call — it's that a leveraged-ETF-heavy market structure turned a legitimate positive catalyst into another volatile round-trip that left the index below 5,600 anyway. Until the rebalancing mechanics or the retail leverage exposure change, good news alone may not be enough to hold a rally.