Kospi bear market deepens as AI-driven rally unwinds

South Korea's benchmark index has fallen more than 20% from its peak, marking a sharp reversal after a three-year surge fueled by artificial intelligence optimism.

By Handelsavisen Newsroom · Automated 2026-07-21 04:08 UTC · 1 min read

South Korea's Kospi index has officially entered bear-market territory, dropping more than 20% from its recent highs.

The milestone underscores a dramatic reversal for a market that was widely regarded as one of the strongest performers globally over the past three years, driven largely by the artificial intelligence boom.

A notable 30% fall from the June peak has eroded much of the gains accumulated during the AI-driven rally.

The decline has been volatile, with the index swinging sharply in recent months.

A notable 30% fall from the June peak has eroded much of the gains accumulated during the AI-driven rally.

The sell-off has been particularly severe in the technology sector, which had been the primary beneficiary of the previous bull run.

Market participants are now grappling with a reality check as the momentum shifts.