South Korea's KOSPI Plunges to Worst Monthly Drop in History
The South Korean stock market has experienced its worst monthly decline on record, with the benchmark KOSPI index falling over 33% in July. This surpasses previous crises such as the October 1997 IMF crisis and the global financial downturn of October 2008. The collapse was driven by a rapid unwind of leveraged bets tied to AI chipmakers like Samsung Electronics (005930.KS) and SK Hynix, alongside broader market concerns over slowing demand for artificial intelligence technology. The KOSPI had surged more than 116% in the first half of 2026 before collapsing. Record levels of leverage—reaching $19.7 billion in leveraged bets—and heavy retail investor participation through single-stock ETFs contributed to extreme volatility. The market was further hit by news that China has begun mass production of domestic deep ultraviolet (DUV) chipmaking tools, which threatens DRAM prices and led to a sharp drop in SK Hynix shares after it missed revenue estimates. The Bank of Korea’s first rate hike since 2023 added pressure on the market. Circuit breakers halted trading for two consecutive days, erasing over $864 trillion won from investor portfolios and prompting an emergency meeting among financial authorities.
Tickers: $SKHYV
Topics: AI chips KOSPI leverage semiconductors South Korea stock market