Kospi Plunges 8% as AI Rally Faces Fresh Stress
Yahoo Finance ·
Kospi Plunges 8% as AI Rally Faces Fresh Stress Khac Phu Nguyen Fri, June 26, 2026 at 7:25 AM EDT 2 min read 005930.KS AAPL 000660.KS This article first appeared on GuruFocus . South Korean stocks have been hit by a sharp wave of volatility as the AI trade moved from optimism to anxiety in just one week. The Kospi climbed to a record above 9,000 on Monday, dropped 10% the next day, recovered part of that loss, then fell again on Friday in a move that triggered an 8% plunge and a circuit breaker. The moves suggest investors may be starting to question whether the AI-driven rally can keep running after such a powerful advance. Warning! GuruFocus has detected 7 Warning Signs with SSNLF. Is SSNLF fairly valued? Test your thesis with our free DCF calculator. Samsung Electronics ( SSNLF ) and SK Hynix ( HXSCL ) each fell more than 10% at their Friday lows as investors reacted to Apple ( NASDAQ:AAPL ) product price hikes, reports that OpenAI may delay its IPO, and concerns around large new investment plans from Korea's biggest chipmakers. Samsung Group is reportedly preparing to announce a 1,000 trillion won spending package over the next decade, a scale that could raise concerns about future cash flow. Foreign investors continued selling Korean shares, while retail investors bought more than $5 billion of Kospi stocks, adding another layer of pressure to a market already being pushed around by margin trading and leveraged ETFs. The Kospi has surged about 200% year-on-year, driven heavily by Samsung and SK Hynix, which together account for nearly 60% of the index's weighting. That concentration could make the market more vulnerable when sentiment around AI chips shifts quickly. The Kospi 200 Volatility Index hit a fresh peak in the past two days and is now about five times higher than the Cboe Volatility Index in the US, while options activity tied to Samsung, SK Hynix, and the iShares MSCI South Korea ETF ( EWY ) has climbed as investors look for protection in a market with no clear direction.
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