Samsung Electronics' second-quarter profit surged, and combined with the South Korean government's intervention to stabilize the market, the country's stock market staged a strong rebound after two days of sharp declines.

On Thursday, July 30, the Korea Composite Stock Price Index (KOSPI) expanded its intraday gains to over 5%. This followed a cumulative 16% drop in the index over the previous two sessions, which triggered two consecutive market-wide circuit breakers. The MSCI Asia Pacific Index rose 0.8% in tandem.

Today, Samsung Electronics reported that its second-quarter operating profit surged more than 18 times year-on-year, while its semiconductor operating profit reached 89 trillion won, a 250-fold increase from the same period last year. Bolstered by the news, Samsung Electronics' share price climbed 5.5% during the session.

Another semiconductor giant, SK Hynix, which had seen its stock fall nearly 25% over the previous two trading days, rebounded on Thursday with a gain of 2%.

In the Japanese market, the Nikkei 225 index rose over 2% intraday, with Kioxia surging more than 12%.

South Korea's Emergency Action to Curb Leveraged ETFs

After the market close on Wednesday, the South Korean Ministry of Economy and Finance, the Bank of Korea, and financial regulators held an emergency meeting. They pledged to take additional measures to stabilize the stock market and tighten retail investors' access to leveraged ETFs.

According to the South Korean Ministry of Economy and Finance, the new measures include linking the cap on retail investors' holdings of leveraged ETFs to their total investment portfolio and increasing related trading costs.

The previous two-day plunge cost investors billions of dollars. The consecutive triggering of the market-wide circuit breaker mechanism was a first in the history of the South Korean stock market.

Furthermore, the KOSPI has now dropped approximately 40% from its peak in June. The core logic behind this decline lies in market doubts about the sustainability of the AI trade. Investors are re-evaluating whether AI-driven semiconductor demand can be maintained long-term, and South Korea, as a core global supplier of memory chips, has been hit the hardest.

However, some market participants view this volatility as a normal cost. Josh Gilbert, Chief Market Analyst at eToro for the Asia Pacific and Middle East, stated: "This volatility is the price of entry, not proof that the AI story is over."