South Korea’s stock market plunges as AI-driven boom fades - Al Jazeera

What the report says

Al Jazeera, citing Reuters, reported that South Korean equities fell sharply for a second straight session on July 29, 2026, as enthusiasm for chip and artificial intelligence-linked stocks weakened. The benchmark KOSPI dropped as much as 12.6 percent during Wednesday trading before ending 6 percent lower, after an almost 11 percent fall on Tuesday. The report said Seoul’s market had lost about $2.18 trillion in value and was heading toward its worst monthly decline on record.

The selloff has hit investors who had benefited from a rapid AI-driven rally in semiconductor-related shares. According to the report, the KOSPI has now lost nearly 40 percent from a high reached a little over a month earlier. Frank Benzimra of Societe Generale said the hardest-hit stocks were those with the greatest leverage, while Jon Withaar of Pictet Asset Management described signs of panic and forced unwinding across Asian technology trades.

South Korean officials are reviewing steps to calm the market. Finance Minister Koo Yun-cheol apologized in parliament for the rollout of single-stock leveraged exchange-traded funds, saying they had not been sufficiently considered. Koo later met with the Bank of Korea governor and financial regulators to discuss the turmoil.

After the meeting, the Finance Ministry said it would seek additional restrictions on single-stock leveraged products, including possible limits on individual exposure, higher costs to discourage excessive trading, simulated trading requirements, and a legal framework for emergency stabilization measures. Despite the recent plunge, Al Jazeera reported that the KOSPI remains up 41.5 percent in U.S. dollar terms for the year, still making it the strongest major market in 2026.