South Korea’s Kospi, the world’s best-performing market of 2026, entered bear market territory on Wednesday, falling 20% from its peak of 9,386, as tech stocks’ declines after a massive rally continued to keep investors on edge.
On Wednesday, the country’s benchmark Kospi index fell another 4%, or 310 points, to 7,347, extending losses to a third straight session. It comes as shares of heavyweight Samsung Electronics fell nearly 4% and rival SK Hynix rose 1%. Shares of battery maker LG Energy Solution fell 4%.
The sharp sell-off was triggered in the previous session after Samsung shares fell nearly 10% on Tuesday, even after the world’s largest memory chip maker forecast a 19-fold jump in its second-quarter operating profit. Samsung’s sharp drop in share price may have been fueled by concerns about the duration of the AI-fueled chip boom.
Some analysts attribute the sharp drop in Samsung stock prices to higher market expectations driven by record prices for memory chips. “Samsung’s strong earnings were widely expected and largely priced in after its shares rose ahead of the results,” Reuters quoted Albert Yong, managing partner at Petra Capital Management, as saying.
Also read | Explained: Why Samsung shares fell 10% even after the tech giant forecast a 19-fold jump in profits
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“Investors remain concerned about the sustainability of the AI boom and the risk of a slowdown in AI infrastructure spending by US big tech companies,” Yong added. Notably, memory chip prices rose sharply during the quarter as AI spending expanded beyond high-bandwidth memory (HBM) and into conventional DRAM and NAND products.
FIIs became net sellers in South Korea
Wednesday’s collapse also came amid heavy selling by foreign investors following gains this year. Foreign investors were net sellers of 471.7 billion won ($311.68 million) worth of shares in the South Korean stock market.
The US stock market also fell yesterday, with the tech-heavy Nasdaq index falling more than 1% as volatility in chipmaker shares rose on fears over artificial intelligence and growing concerns about risky investment products. Shares of Intel, Micron and AMD fell up to 10%. The Philadelphia Semiconductor Index also lost nearly 5% as investors questioned whether AI-related spending could be sustained.
Kospi remains the best performing stock market index in the world
Despite the sharp sell-off in the South Korean stock market, the Kospi continues to hold its position as the world’s best-performing major stock index in 2026, up 74% this year, driven largely by gains in artificial intelligence-related semiconductor stocks. Goldman Sachs remains bullish on the South Korean stock market, saying earnings performance is increasingly improving in other sectors. “Additional foreign inflows have already begun to rotate toward other AI-related beneficiaries and industrial businesses, and we expect this trend to continue as investors seek access to the broader AI supply chain and non-AI capabilities,” analysts said in a Sunday note, as quoted by Business Insider.
Also read | S&P 500 and Nasdaq end lower as concerns over artificial intelligence hit chipmakers
(With participation of agencies)
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