After four days of sharp declines, South Korea's stock market staged a "miraculous rebound" on July 31, 2026, bringing relief to the market, as Microsoft's AI profitability confirmation and strength in US semiconductor stocks triggered strong foreign investor buying. The KOSPI surged 14.44% to recover the 6,000 level.

As of 9:49 a.m. on the day, the KOSPI briefly rose 14.44% to 6,401.10 during the session, firmly maintaining the 6,000 level. The KOSDAQ also closed up 8.44% at 699.20, approaching the 700 level. In particular, Samsung Electronics jumped 20.53% and SK Hynix surged 25.42%, powerfully driving the index higher. This was largely due to the Philadelphia Semiconductor Index surging 8.19% on the US New York stock market the previous night.

Foreign investors led the rebound by net buying 4.8646 trillion won in the securities market. In contrast, individual investors net sold 4.4598 trillion won, using the sharp rally as an opportunity to take profits. Domestic 10-year treasury bond yields maintained the 4.3% level, subtly affecting investment sentiment.

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Despite the dramatic rebound, the KOSPI plummeted 34.01% throughout July, leaving deep scars on the market. This is an unprecedented record, exceeding the monthly maximum decline of 27.24% during the 1997 IMF financial crisis in October. Meanwhile, regulatory authorities implemented supplementary measures on this day, raising the basic deposit for single-stock leveraged ETFs from 10 million won to 30 million won, heightening expectations for moderating excessive volatility.

Heo Jae-hwan, a researcher at Eugene Investment Securities, expressed a cautious stance on the rebound. Researcher Heo emphasized, "There is a possibility that the market may rise faster than expected to the upper 6,000s, but the problem is what comes next. More important than selling volume and liquidation volume is market confidence," underscoring the importance of restoring market trust.

At a critical juncture of whether this sharp rebound will remain a short-term technical bounce or mark a bottom and transition to full-scale recovery, experts emphasize the importance of restoring market confidence. Without fundamental efforts to revive individual investor sentiment, which has been damaged by July's historic decline, resolve the sense of exclusion from non-semiconductor stocks, and strengthen incentives for long-term capital inflows, sustaining a continuous rise will be difficult, experts cautiously note, presenting tasks for the market's healthy recovery.