{"id":103165,"date":"2026-07-29T15:21:12","date_gmt":"2026-07-29T15:21:12","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/103165\/"},"modified":"2026-07-29T15:21:12","modified_gmt":"2026-07-29T15:21:12","slug":"south-korea-2-trillion-stock-rout-breaks-records-as-sk-hynix-results-disappoint-2","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/103165\/","title":{"rendered":"South Korea $2-trillion stock rout breaks records as SK Hynix results disappoint"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

A monitor shows the Korea Composite Stock Price Index (KOSPI) at the Korea Exchange in Seoul, South Korea, Wednesday, July 29.Ahn Young-joon\/The Associated Press<\/p>\n

South Korean stocks plunged for a second straight session on Wednesday as Asia\u2019s once-blazing AI rally morphed into a brutal market reckoning, wiping as much as $2.18 trillion from Seoul\u2019s equity market and leaving leveraged retail investors reeling.<\/p>\n

The benchmark KOSPI index dived as much \u2060as 12.6 per cent before trimming \u200bsome losses to close down 6 per cent, extending Tuesday\u2019s near-11-per-cent rout and putting the market on course for its steepest monthly decline on record. The slide has erased almost 40 per cent of the index\u2019s value from a peak reached little more than a month ago.<\/p>\n

Volumes were light, suggesting buyers have evaporated from what just weeks ago was the hottest trade in global markets \u2014 buying the chipmakers raking in cash from AI investment.<\/p>\n

Much of that buying \u200bwas done by small-time investors using borrowed money to increase their exposure, and that dynamic, which \u200caccelerated the rally, is exacerbating the selloff as brokers forcibly shut down losing positions.<\/p>\n

Under pressure from lawmakers during a parliamentary session, Finance Minister Koo Yun-cheol apologized for the introduction of single-stock leveraged ETFs, saying they had not been considered carefully enough. He added that the government is reviewing market stabilization measures, including adjusting regulation related to the funds, which some analysts have blamed for increasing the amount of leveraged trading in the Seoul bourse.<\/p>\n

Koo, the governor of the Bank of Korea, and the heads of financial regulators \u200cmet late on Wednesday \u200bto discuss the situation. The meeting came two \u200cweeks after their last meeting on July 16 when they announced tighter regulations to cool the ETF investment boom.<\/p>\n

In a statement after the meeting, the \u200bfinance ministry said it would immediately pursue further curbs on single-stock leveraged products, including individual \u2060investment limits \u2014 citing a cap of up to 20 per cent of an investor\u2019s total investment amount as an example \u2014 higher trading costs to \u2060deter excessive activity and simulated trading requirements.<\/p>\n

It will also prepare a legal basis for emergency market-stabilization steps.<\/p>\n

\u201cIt\u2019s certainly a very crowded trade which is being unwound,\u201d said Frank Benzimra, head of \u200bAsia equity strategy at Societe Generale in Hong Kong.<\/p>\n

\u201cIf you look at what is falling in the market, it has been the stocks in which you have the most leverage,\u201d he said. \u201cIt\u2019s very difficult to say when will this selloff end, but at the moment, it\u2019s definitely not the trade where we want to be.\u201d<\/p>\n

Even blockbuster earnings from SK Hynix, which reported a six-fold jump in profit, failed to stem the panic as the results lagged lofty expectations. The chipmaker\u2019s shares slumped nearly 20 per cent before recovering some \u2060ground, closing down 9.6 per cent, while Samsung Electronics fell as much as 14 per cent before trimming losses to 5.2 per cent.<\/p>\n

U.S.-listed shares of SK Hynix fell 5.9 per cent in premarket trading.<\/p>\n

Together, the two chip giants account for more than half of the KOSPI\u2019s market value and have exerted substantial influence over the market this year as traders seek a slice of the lucrative AI trade amid a shortage of advanced memory chips.<\/p>\n

\u201cHopes of the market rebounding today after a 10 per cent plunge yesterday faded, triggering panic selling and forcing most stock investors to book losses,\u201d said Han Ji-young, an analyst at Kiwoom Securities. \u201cDoubts are prevalent in the \u2060market that the current index level would not be the bottom.\u201d<\/p>\n

Semiconductor stocks across Asia took a \u200bbeating. Shares in Taiwan\u2019s TSMC, the world\u2019s biggest contract chipmaker, fell 3.5 per cent in Taipei, while UMC, another Taiwanese chip foundry, fell 9.7 per cent. In Tokyo, Kioxia, a Japanese \u2060memory chipmaker, plunged 13.9 per cent.<\/p>\n

\u201cThere was definitely signs of panic and forced unwind in Asia technology today, not only on the long side, but also on the short side in Japan where you saw heavily \u200cout of favor names such as Nintendo and Sony rallying very strongly to compound the pain,\u201d said Jon Withaar, a senior portfolio manager at Pictet Asset Management in \u200bSingapore.<\/p>\n

\u201cThe fast money market is keen to derisk ahead of key hyperscaler earnings as well as the upcoming Fed rate decision, where whispers of a hike in recent days have added to the unwind urgency.\u201d<\/p>\n

Despite the tumble, the KOSPI is up 41.5 per cent in U.S. dollar terms year-to-date, making it the best-performing major market this year.<\/p>\n

\u201cToday\u2019s price action suggests that the leverage within Korean equities remains high and a further unwind \u200bcould be expected,\u201d said Asia-Pacific macro strategist Wee Khoon Chong at BNY in Hong Kong.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: A monitor shows the Korea Composite Stock Price Index (KOSPI) at the Korea…\n","protected":false},"author":2,"featured_media":103166,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[457],"tags":[18487,18478,18488,1523,18470,18489,363,18469,18483,18484,18480,18471,18468,119,12048,77,18482,18476,18498,18472,18473,9581,337,864,18479,2659,1175,18490,18475,18493,18494,18496,8374,18495,4262,18492,18474,17865,18486,414,18485,18491,18477,1013,4714,18481,17057,76,18497],"class_list":["post-103165","post","type-post","status-publish","format-standard","has-post-thumbnail","category-korea-exchange","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-korea-exchange","tag-krx","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/103165","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=103165"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/103165\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/103166"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=103165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=103165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=103165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}