🇰🇷 South Korea's MARKET CRASH is the fastest and most severe in modern Asian market history:

The index has fallen ~38% from its June peak in just 27 trading days, before rebounding on Friday.

This is a deeper decline than any of the other 4 major Asian market crashes tracked over a comparable window, including the Asian financial crisis and the Global Financial Crisis.

On Monday, the market resumed its fall, with the KOSPI dropping as much as -5.5%.

Samsung and SK Hynix both fell about -9%, reversing part of the gains that saw them surge +27% and +30%, respectively, in Friday's record rally.

Foreign investors, who had purchased a record amount of KOSPI shares on Friday, drove Monday's reversal, selling -$698 million of Korean stocks in early trading.

China's rapid advances in AI and semiconductors, raising concerns about future competition for Korean chipmakers, added to the headwinds weighing on sentiment.

🔗 Global Markets Investor

🇰🇷 Korean stock market crash threatening to upset tech boom

In the past five weeks, the market has collapsed, shedding almost 40 per cent, and threatening the livelihood of millions of South Koreans.

The shock waves are spreading across the globe as investors fret the meltdown on one of the world's most technology-intensive markets may be an omen of things to come.

Concerns are mounting globally about the stupendous, some say stupid, level of spending by the world's leading technology firms that has begun to rattle Wall Street.

Once considered an exotic financial sideline, the South Korean Kospi has become one of the most acutely observed markets in the world; many view it as a possible harbinger for the end of a four-year boom in technology stocks.

More than a million South Koreans are underwater as a result of the crash, and several hundred thousand have lost everything, and then some.

They borrowed to the hilt to take part in a frenzied splurge on technology stocks, particularly memory chip makers, in a market now experiencing a savage reversal.

Nothing, not even the stellar earnings of the country's two biggest chip makers, has been able to stem the panic, primarily because the debt that fuelled the stock market boom is now accentuating the crash.

epeated attempts by Seoul's market authorities to put a handbrake on the losses by suspending trading have only made the problem worse.

The collapse, which began last month, follows an astonishing rise on the country's market index, the Kospi, over the past 12 months.

At its peak, it had surged more than three-fold in just a little over a year.

Chip makers were in hot demand as the big American tech firms, having spent trillions of dollars in the race for AI dominance, began the next phase of the boom: rolling out AI to the world.

An obscure American chip maker, Nvidia, had already shot to prominence when it was discovered that its gaming chips were ideal for developing AI platforms, and it suddenly took the mantle of the world's most valuable corporation.

But when Silicon Valley's tech giants — Amazon, Microsoft, Meta, Alphabet, Oracle, Apple and Tesla — began a rush to build data centres, they created an extreme shortage of ordinary memory chips, the kind used in mobile phones and laptops.

A mere handful of companies dominate this area. One is Samsung Electronics, and another is SK Hynix.

Both are South Korean giants and, three years ago, made up about a quarter of the Korean stock market.

By last month, as their earnings soared on an acute global chip shortage and their stock prices multiplied, they comprised 60 per cent of the Kospi's total value.

As late as April, regulators, in an ill-fated move, approved further new trading methods to allow investors greater use of debt when investing in individual stocks.

On Wednesday, South Korea's Finance Minister Koo Yun-cheol was forced to apologise after several politicians accused the government of turning the stock exchange into a casino.

🔗 https://www.abc.net.au/news/2026-08-03/korean-markets-threatening-upset-tech-boom/106981956