India has weathered global AI-led market sell-off better than some of its Asian peers, with Nifty 50 down 12 percent from its 2026 peak, while South Korea's Kospi fell 37 percent. Taiwan's Taiex, another major beneficiary of the semiconductor boom, is down 9.2 percent from its peak, while Hong Kong's Hang Seng has slipped 17 percent. The correction comes as investors increasingly question whether Big Tech's massive investments in AI will generate adequate returns, dragging the Nasdaq Composite nearly 3 percent lower last week on Friday to its lowest level in almost three months.
The sharp correction in South Korea and Taiwan comes after both markets had rallied sharply on the back of the global AI and semiconductor boom. Despite the recent losses, the Kospi is still up 47 percent so far this year, while Taiwan's Taiex has gained 59 percent, making it one of the strongest-performing markets globally in 2026.
Foreign investors pull out the most from Taiwan, South Korea
The correction has coincided with a sharp reversal in foreign investor flows, particularly across markets that have benefited from the AI trade.
Foreign investors have pulled out $31.78 billion from Taiwan in October so far, the highest outflow among the markets tracked, while South Korea has seen withdrawals of $14.6 billion. The two markets have also witnessed significant foreign selling over the course of the year, with cumulative outflows of $68.7 billion from Taiwan and $141.3 billion from South Korea.