South Korean stocks are attempting to rebound after a sharp recent pullback, but an analyst says a return to previous highs in the third quarter may be difficult. According to a July 20 report from iM Securities researcher Kim Jun-young, the KOSPI is more likely to remain in a range-bound phase as investors look for direction, and that pattern could last until the end of the year. Kim said margin financing balances remain elevated, a condition that could amplify market volatility and lead to bigger swings in the index. He also warned that if the index falls further, investors should watch for the risk of credit-driven selling triggered by forced liquidation of margin positions. The comments point to a market still under pressure despite attempts to stabilize after the recent decline.
South Korean stocks are trying to rebound after a sharp recent pullback, but an analyst said it may be difficult for the market to reclaim its previous highs within the third quarter.
With KOSPI margin financing balances still at elevated levels, market volatility could expand further. The market is expected to stay range-bound and search for direction through the end of the year.
iM Securities flags difficulty in reclaiming earlier highs
Kim Jun-young, a researcher at iM Securities, said in a report dated July 20, “Rather than expecting the KOSPI to return to its previous high within the third quarter, it makes more sense to see the market remaining in a range-bound phase while searching for direction, and this situation could continue until year-end.”
He added, “Persistently high margin balances mean elevated volatility could amplify swings in the index.”
Kim also said, “If the index falls further, there is also a need to watch for the risk of credit selling triggered by the liquidation of margin positions.”
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
