Kospi Tumbles 25%, Erasing $1 Trillion as AI Swings in Samsung and SK Hynix Roil Markets
Updated
Updated · Fortune · Jul 19
Kospi Tumbles 25%, Erasing $1 Trillion as AI Swings in Samsung and SK Hynix Roil Markets
3 articles · Updated · Fortune · Jul 19
Summary
$1 trillion has been wiped from South Korea’s stock market since the Kospi’s June peak, with the benchmark down 25% after AI-driven selling hit Samsung Electronics and SK Hynix.
A near 9% Kospi drop last Monday spilled into Wall Street, where SK Hynix’s US-listed shares fell 9.3%, underscoring how Seoul now helps set the tone for global chip trading.
The linkage has tightened sharply: the 60-day correlation between the Kospi and Nasdaq 100 has risen to 0.46, nearly triple its five-year average of 0.16, while downside sensitivity hit its highest since 1990 on July 7.
Global investors now track Korean stocks before their own sessions, though Seoul’s influence may ease if the rout deepens and after regulators temporarily halted new single-stock leveraged ETF listings to curb speculation.
Even after the selloff, the Kospi remains up 62% this year, and Samsung and SK Hynix’s central role in memory chips is likely to keep Korea a key barometer for the AI trade.
Can South Korea’s market reforms transform its volatile tech hub into a stable, long-term investment powerhouse?
With the AI boom depending on Korean chips, is this concentrated supply chain a ticking time bomb for the global economy?
KOSPI Plunge Below 7,000: Anatomy, Fallout, and Global Lessons from South Korea’s 2026 Market Crash
Overview
In July 2026, the South Korean equities market faced severe turbulence as the KOSPI index dropped sharply below the key 7,000 level, capping a year of high volatility. This downturn was driven by persistent global uncertainty and weakening domestic economic signals, which together eroded investor confidence. As the KOSPI struggled to recover, short-term investor sentiment became closely tied to its performance. The ongoing instability led to heightened anticipation of regulatory intervention, with market participants watching for policy actions to restore stability and confidence in the market.