KOSPI retreats to 6,700 level amid semiconductor slump

The KOSPI index retreated to the 6,700 level after a three-day rally, closing down 1.79% at 6,788.88. The decline was primarily driven by a sharp drop in semiconductor leaders Samsung Electronics and SK Hynix, which fell 3.38% and 4.45% respectively. Market volatility was influenced by the Bank of Korea's decision to raise the base interest rate from 2.75% to 3.00%, alongside concerns regarding potential U.S. semiconductor tariffs and upcoming economic indicators.

In response to market volatility and a shift toward a consolidation phase, investor interest in covered call ETFs has increased. These products are being used to secure stable cash flow through monthly distributions, often targeting annual yields exceeding 10%.

Simultaneously, major South Korean corporations are expanding shareholder return programs. SK Hynix announced a 40 trillion won plan for share buybacks and cancellations, Samsung Electronics proposed a shareholder return measure valued between 90 trillion and 110 trillion won, and Hyundai Motor committed to canceling 2.5 million shares worth 789.1 billion won.