{"id":88112,"date":"2026-07-16T06:43:08","date_gmt":"2026-07-16T06:43:08","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/88112\/"},"modified":"2026-07-16T06:43:08","modified_gmt":"2026-07-16T06:43:08","slug":"what-does-south-koreas-kospi-chaos-mean-for-chinas-markets","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/88112\/","title":{"rendered":"What does South Korea\u2019s Kospi chaos mean for China\u2019s markets?"},"content":{"rendered":"<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">The volatile state of South Korean stocks is reminiscent for some investors of China\u2019s rapid boom-to-bust cycle a decade ago, analysts say, when leveraged trading fuelled a meltdown that eventually wiped US$5 trillion from the market within months.<\/p>\n<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">The South Korean stock market\u2019s frantic artificial intelligence trade has many similarities to China\u2019s markets in 2015, when record-high outstanding margin debts and a retail frenzy led to government intervention that eventually deflated the stock bubble.<\/p>\n<p>South Korea\u2019s current <a target=\"_self\" class=\"e1yy41x40 ef9u0v01 css-1ankfgb ecgc78b0\" href=\"https:\/\/www.scmp.com\/week-asia\/economics\/article\/3357950\/why-south-koreas-ai-chip-boom-serious-concern-its-economy?module=inline&amp;pgtype=article\" title=\"\" data-qa=\"BaseLink-renderAnchor-StyledAnchor\" rel=\"nofollow noopener\">dominance in the global memory-chip<\/a> market means a spillover effect may sway the AI trade in China and other key equity markets. After South Korea\u2019s Kospi index entered a technical bear market with a 20 per cent decline from its record high last month, China\u2019s tech-centric Star Market 50 Index retreated more than 10 per cent over the past two weeks.<\/p>\n<p datatype=\"p\" data-qa=\"Component-Component\" class=\"e8zc9q40 css-1c6uqr6 ec74h0k1\">\u201cSouth Korean stocks may become an amplifier of sentiment on global technology stocks, given the high leveraged levels,\u201d said Jin Qianjing, an analyst at Shenwan Hongyuan Group. \u201cThe market may face a double whammy of high leverage and an exodus of foreign capital in the short term.\u201d<\/p>\n<p>The outstanding value of leveraged bets in South Korea was at a record high of 29.2 trillion won (US$19.7 billion) in early July after the introduction of the single-stock exchange-traded funds (ETFs) linked to Samsung Electronics and SK Hynix, prompting retail investors to take on extra leverage <a target=\"_self\" class=\"e1yy41x40 ef9u0v01 css-1ankfgb ecgc78b0\" href=\"https:\/\/www.scmp.com\/business\/banking-finance\/article\/3357851\/south-korean-investors-leverage-hong-kong-cash-ai-and-chips-boom?module=inline&amp;pgtype=article\" title=\"\" data-qa=\"BaseLink-renderAnchor-StyledAnchor\" rel=\"nofollow noopener\">to buy the ETFs for AI exposure<\/a>.<img decoding=\"async\" alt=\"Currency traders at the Korea Composite Stock Price Index (KOSPI) in Seoul on July 3. Photo: AP\" data-qa=\"BaseImage-handleRenderImage-StyledImage\" class=\"e1gf69pb2 css-6ikqhs e445x7d0\" loading=\"lazy\" src=\"https:\/\/www.europesays.com\/korea\/wp-content\/uploads\/2026\/07\/ba505843-bd5b-44f2-a599-3ddc9252a6c4_ebc09d15.jpg\" title=\"Currency traders at the Korea Composite Stock Price Index (KOSPI) in Seoul on July 3. Photo: AP\"\/>Currency traders at the Korea Composite Stock Price Index (KOSPI) in Seoul on July 3. Photo: APAt its peak, the Kospi had jumped 116 per cent this year, lifting <a target=\"_self\" class=\"e1yy41x40 ef9u0v01 css-1ankfgb ecgc78b0\" href=\"https:\/\/www.scmp.com\/week-asia\/economics\/article\/3355189\/transitory-euphoria-south-koreas-strong-economic-outlook-masks-key-hurdles?module=inline&amp;pgtype=article\" title=\"\" data-qa=\"BaseLink-renderAnchor-StyledAnchor\" rel=\"nofollow noopener\">South Korea<\/a> to the world\u2019s sixth-largest stock market status, before an initial unwinding of leveraged positions increased volatility and triggered bouts of halts to trading. Sentiment turned after the Korean government signalled it would intervene to contain the crisis.<\/p>\n","protected":false},"excerpt":{"rendered":"The volatile state of South Korean stocks is reminiscent for some investors of China\u2019s rapid boom-to-bust cycle a&hellip;\n","protected":false},"author":2,"featured_media":88113,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[46483,31,46484,33,18757],"class_list":["post-88112","post","type-post","status-publish","format-standard","has-post-thumbnail","category-south-korea","tag-china-stocks","tag-korea","tag-leveraged-bets","tag-south-korea","tag-south-korea-stocks"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/88112","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=88112"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/88112\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/88113"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=88112"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=88112"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=88112"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}