Significant rebounds are occurring in leveraged exchange-traded funds tracking South Korea's major memory chip stocks, with a leveraged SK Hynix fund surging more than 10% at one point. As of the latest update, the Leveraged SK Hynix ETF (07709) is up 7.05%, trading at HK$64.12, while the Leveraged Samsung Electronics ETF (07747) has gained 4.11%, reaching HK$92.8.

On the news front, the South Korean KOSPI index turned positive in afternoon trading, having earlier declined by more than 5%. Shares of both Samsung Electronics and SK Hynix rebounded over 3%. This follows a report from SemiAnalysis which countered a bearish report on SK Hynix issued by a Korean securities firm yesterday. The SemiAnalysis report suggests that SK Hynix's DRAM profitability will remain strong starting from the second quarter of 2026 and beyond.

HuaTai Securities has commented that the more than 20% pullback in South Korean stocks from their highs is not driven by fundamental factors. Instead, greater pressure stems from high volatility caused by elevated market concentration and leverage.

In other developments, the South Korean government on Tuesday raised its economic growth and inflation forecasts for this year, citing robust chip exports and fiscal stimulus measures. It has also been reported that a high-level economic coordination mechanism involving four government departments will convene a meeting this Thursday. The agenda includes studying countermeasures against the impact of single-stock leveraged ETFs on the stock market, marking the first formal discussion of this issue within the mechanism.