South Korea’s equity markets are undergoing a sharp correction, with the benchmark KOSPI index extending its decline to approximately 30% from its June peak.
The volatility has intensified following a severe sell-off that triggered a 20-minute trading halt earlier in the week, as investors rushed to exit positions in the technology sector that had previously driven the market's multi-year expansion.
The recent crash, which saw the index drop nearly 10% in a single session, was fueled by a massive liquidation of tech stocks, including major semiconductor manufacturers.
The KOSPI has officially entered bear market territory, marking a stark reversal from the more than 200% gain the index posted over the previous three years.
The recent crash, which saw the index drop nearly 10% in a single session, was fueled by a massive liquidation of tech stocks, including major semiconductor manufacturers.
The severity of the decline prompted the exchange to activate circuit breakers, highlighting the fragility of sentiment after the prolonged AI-driven rally.
Analysts describe the current move as a necessary "reality check" for a market that had become increasingly detached from fundamentals during the artificial intelligence boom.