South Korea’s stock market is facing a deepening sell-off as concerns over artificial intelligence (AI) spending, semiconductor valuations and rising financing costs rattle investors. The benchmark KOSPI fell another 5% on Tuesday, extending its losses as investors pulled back from AI-linked stocks.
The index had surged earlier this year, with its gains reaching around 116% at its record close in June. However, the subsequent correction has erased much of that rally, leaving the KOSPI up approximately 30% in 2026. The index has also fallen 39% from its peak of 9,386 earlier this year to 5,493.24 currently.
The sell-off accelerated in July, when the KOSPI fell 22%, and continued into October, with the index losing another 17% through October 16. The latest pressure has been particularly severe for semiconductor stocks, which account for a significant share of South Korea’s market.
SK Hynix shares have plunged around 35% from their peak, while Samsung Electronics has fallen approximately 22%. The weakness has spread to newer AI-linked businesses, too, with data-centre infrastructure company Elice Inc. dropping as much as 32% during its trading debut in Seoul.
The latest decline follows a global sell-off in AI and semiconductor stocks that wiped out more than $1 trillion in market value from 20 of the world’s most valuable AI and semiconductor companies last week.