South Korean stock market faces margin call crisis; July forced liquidations reach 3.442 trillion KRW

Huo Xing Finance reports that, according to data from the Korean Financial Investment Association, the recent sharp decline in the Korean stock market has accelerated deleveraging in margin trading, with cumulative forced liquidations reaching KRW 344.2 billion in July, including a single-day forced liquidation volume of KRW 142.2 billion on July 9. Due to a two-trading-day lag in forced liquidation data, the selling pressure triggered by the KOSPI’s nearly 9% plunge on July 13 has not yet been fully reflected; market participants expect further increases in subsequent liquidation volumes. On July 13, the KOSPI index closed down 8.95%, triggering both the seller program order suspension mechanism (Sidecar) and the first-level circuit breaker. The semiconductor sector suffered heavy losses, with SK Hynix plunging 15.37%—its largest single-day drop in history—and Samsung Electronics falling 10.7%. Meanwhile, margin balances, credit financing outstanding, and investor deposits among individual investors in Korea have continued to decline, as the market enters a deleveraging cycle of “falling prices—forced liquidations—further declines.”