South Korea's KOSPI Plunges 40% From June Peak as AI Chip Rally Burns Rookie Investors
Updated
Updated · Al Jazeera English · Aug 19
South Korea's KOSPI Plunges 40% From June Peak as AI Chip Rally Burns Rookie Investors
3 articles · Updated · Al Jazeera English · Aug 19
Summary
Nearly 40% erased from the KOSPI since its June peak has left many first-time South Korean investors with steep losses, after they piled into chip shares and semiconductor funds during this year’s AI-driven boom.
A 101.14% first-half surge was powered largely by Samsung Electronics and SK Hynix, which make up more than half the index, leaving the market highly exposed when semiconductor stocks reversed.
28.9 trillion won ($20.7 billion) in margin loans remained outstanding at end-July after peaking at 38.6 trillion won, with forced liquidations deepening losses as the index slid back below 5,595 by July 30.
Lee Jae Myung’s government is under pressure because it encouraged broader stock investing and approved 18 leveraged single-stock ETFs on May 27, later tripling the minimum cash balance for such trades to 30 million won.
43% approval for Lee in an August 10-14 Realmeter poll marked a five-week slide, suggesting the market’s volatility could become a lasting political issue beyond the immediate retail losses.