South Korea KOSPI drops 25% after 60% AI surge
South Korea's KOSPI index just slipped into bear market territory, dropping 25% from its peak in late June (June 2026).
After a wild AI-fueled surge earlier this year, where the index jumped 60% and topped global charts, the party's over, with KOSPI now trading below 7,000.
The sharp fall is a reminder of how risky it can be when markets lean heavily on tech stocks and borrowed money.
Samsung Electronics SK Hynix drive volatility
Semiconductor giants Samsung Electronics and SK Hynix are at the heart of the volatility; together they make up more than half of KOSPI's value.
SK Hynix, which tripled during the AI boom, crashed by 14% on Monday in Seoul.
Even a leveraged ETF tied to SK Hynix took a big hit in Hong Kong.
Foreign investors pull $110B this year
Retail traders, many investing with borrowed cash, have poured trillions of won into KOSPI shares, but their activity dipped sharply in July compared to June's record highs.
Meanwhile, foreign investors have pulled out $110 billion this year, leaving local retail buyers as the main players.
Regulators are stepping up oversight to keep things in check as risks grow.