Leveraged Bets on SK Hynix, Samsung Seen Shaking Korea’s Market

The risks of South Korean stock market’s reliance on two chip heavyweights have long been flagged, but few took them seriously until the nearly $4 trillion market was rocked by volatility after the Iran war.

As investors try to make sense of what caused the gyrations — a record drop followed by the biggest rebound since 2008 — one theory getting traction is the growing influence of leveraged exchanged-traded funds tied to SK Hynix Inc. and Samsung Electronics Co. Together, the two stocks account for nearly 40% of the Kospi Index and half of MSCI Korea, giving their moves an outsized impact on the broader market.