South Korea’s benchmark Kospi index tumbled nearly 6% on Friday, marking a second consecutive day of sharp declines as investors aggressively locked in profits following a prolonged rally driven by artificial intelligence stocks.
The sell-off was broad-based, reflecting a decisive shift in sentiment as traders moved to secure gains after the AI-led surge that had buoyed the market in recent weeks.
The sharp repricing underscores the fragility of the recent rally, which had been heavily concentrated in a narrow set of technology and semiconductor names.
As the momentum faded, the lack of breadth in the advance became apparent, leading to a rapid unwinding of positions.
The decline was not limited to the AI sector, with selling pressure spreading across other market segments as risk appetite evaporated.
This development follows a period of significant outperformance for Korean equities, which had benefited from global enthusiasm for AI infrastructure and chip demand.