South Korean markets appear to be suffering an extreme correction after months of AI-driven growth as chipmakers have come under increasing pressure. Is there any way back for KOSPI?
In a warning to its peers over the fragility of dependence on AI for market growth, the Korea Composite Stock Price Index (KOSPI) has suffered a remarkable decline over the past six weeks, shedding more than a third of its value.
This comes after a whirlwind period of growth that saw the index grow 270 percent since the beginning of 2025 toward its peak value in June 2026 – before mass sell-offs took their toll. The index hit an intraday record high of 9,385.59 on June 19, before plunging down to close at 5,663.24 by July 29. The extreme market volatility has drawn comparisons to the index taking the appearance of a meme stock.
Where will KOSPI go from here? And is there a danger of similar jitters sweeping through other tech-heavy Asian markets?
The root cause of the sell-offs stemmed from fluctuations in the race for AI market dominance in Asia and beyond, with fresh competition from China appearing to create severe downward pressure on key KOSPI stocks.
