{"id":92328,"date":"2026-07-20T12:21:09","date_gmt":"2026-07-20T12:21:09","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/92328\/"},"modified":"2026-07-20T12:21:09","modified_gmt":"2026-07-20T12:21:09","slug":"making-ai-work-south-koreas-share-market-losses-deepen-as-leveraged-ai-bets-take-a-heavy-toll-etenterpriseai","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/92328\/","title":{"rendered":"Making AI Work: South Korea’s share market losses deepen as leveraged AI bets take a heavy toll, ETEnterpriseai"},"content":{"rendered":"

\"<p>TheThe selloff highlighted mounting investor anxiety over a market increasingly driven by \u200cleveraged bets on \u2060AI \u2060chipmakers.
South Korean shares fell nearly 5 per cent on Monday, triggering market-wide trading curbs as investors unwound AI-linked trades, extending a bruising correction that has wiped out more than a quarter of the KOSPI<\/a>‘s value since its June peak.<\/p>\n

The selloff highlighted mounting investor anxiety over a market increasingly driven by \u200cleveraged bets on \u2060AI \u2060chipmakers. Once a peripheral market for global investors, South Korea has become a key barometer of enthusiasm for the AI boom, and is now feeling the downside as sentiment turns.<\/p>\n

The benchmark KOSPI fell as much as 4.7 per cent as traders returned after a long weekend. It was trading down 3.8 per cent at 6,565 points as of 0240 GMT. The chipmaker-heavy gauge has now fallen 28 per cent from its June 22 record-high, extending a four-week losing streak that has brought a dramatic halt to this year’s historic rally.<\/p>\n

A sidecar trading curb was triggered on both the KOSPI and the junior \u2060Kosdaq indexes, \u200chalting programme trading for five minutes.<\/p>\n

Volatility has been amplified by heavy inflows into single-stock leveraged funds, which have drawn waves of retail investors while leaving them exposed to outsized losses when momentum reverses.<\/p>\n

Citi \u2060on Sunday cut its recommendation on South Korea to a tactical neutral from overweight after keeping the market in its preferred category for a year, citing heightened volatility rather than any deterioration in fundamentals.<\/p>\n

“While Korea still screens as the top market in our allocation model, we downgrade to neutral on a tactical basis given ongoing volatility,” said Citi analysts, who maintain a KOSPI target of 10,000.<\/p>\n

That represents a gain of about 50 per cent from current levels.<\/p>\n

Markets were also on edge as an escalating conflict in the Gulf lifted oil prices and reignited inflation concerns. A packed week of major tech earnings \u200cis expected to further test investor faith in the AI trade.<\/p>\n

Shares of SK Hynix<\/a>, the world’s leading AI memory chipmaker, and those of its rival Samsung Electronics<\/a> , fell nearly 6 per cent each. The two stocks make up just over half \u2060of the benchmark KOSPI gauge.<\/p>\n

Hyundai Motor tumbled 7 per cent to its lowest since mid-January this year as a union began a four-hour strike. Sister automaker Kia Corp’s shares also fell 7.5 per cent .<\/p>\n

Market breadth was overwhelmingly negative, with 778 stocks falling versus 114 gainers among 912 traded issues. Foreign investors were net buyers of 415.1 billion won ($280.3 million) worth of shares.<\/p>\n

In the currency market, the won was fetching 1,481.1 per dollar on the onshore settlement platform, 0.33 per cent higher than its previous close at 1,486.0.<\/p>\n

The most liquid three-year Korean treasury bond yield rose by 5.8 basis points to 3.910 per cent , while the benchmark 10-year yield rose by 4.7 basis points to 4.341 per cent.\n <\/p>\n

Published On Jul 20, 2026 at 04:53 PM IST<\/p>\n

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