South Korean stocks plunge 20%, nearing a bear market; the AI boom faces the awkward situation of "the more disastrous the earnings, the steeper the decline."
Related
Analysis: South Korean stocks have plummeted more than 20% from their peak and are poised to enter a technical bear market.
PANews reported on July 8th that, according to Jinshi, the South Korean stock market continued its decline, with the KOSPI index falling by more than 6% intraday, accumulating a drop of over 20% since its June peak, poised to enter a technical bear market. Samsung Electronics and SK Hynix fell by approximately 7% and 5% respectively, as investors reassess the prospects for AI demand. South Korea has been the world's best-performing stock market this year, but its over-reliance on two chipmakers makes it particularly vulnerable to shifts in industry sentiment. Leveraged ETFs amplified two-way volatility, further exacerbating market fluctuations. Despite Samsung Electronics' quarterly profit surging 19-fold this week, chip stocks continued their decline, highlighting that traders are demanding more evidence to justify the exorbitant investments across the entire supply chain. Fidelity International portfolio manager Ian Samson stated, "The current increased volatility stems largely from fundamental uncertainty."
South Korean beauty and retail stocks led the market gains, and Gate.com continues to expand its investment portfolio in South Korean stocks.
According to ChainCatcher, Gate's market data shows that the South Korean stock market was active today. Manyo Factory, a cosmetics stock, reached $11.60, up 18.43%; Heung Koo Petroleum reached $6.88, up 14.72%; and IT'S HANBUL reached $7.25, up 13.51%, with several popular South Korean stocks leading the market gains. Gate has established a 24/7 trading service system covering the three core markets of US, Hong Kong, and South Korea, supporting over 10,000 US stocks and ETFs, over 1,500 Hong Kong stocks, and over 1,000 South Korean stocks, totaling over 12,500 stocks and ETFs globally. Users can participate in global stock investment through their Gate unified account using USDT, supporting fractional share transactions starting from as low as 0.01 shares, and enjoying stock dividend rights. The platform also supports cross-brokerage transfers for US and Hong Kong stocks, as well as corporate actions such as stock splits and consolidations, further optimizing the stock investment service experience.
Japanese and South Korean stocks closed lower, with South Korean stocks falling more than 5%.
According to Gate data, the Nikkei 225 Odaily closed down 1437.91 points, or 2.11%, at 66819.05 on Wednesday, July 8. The South Korean KOSPI index closed down 409.53 points, or 5.35%, at 7246.78 on Wednesday, July 8. The index briefly triggered a temporary trading halt during the session and has now fallen about 20% from its June high, approaching a technical bear market.
Data: Since 2026, foreign capital outflows from the South Korean stock market have exceeded $100 billion.
According to Odaily Odaily, Coin Bureau published an article on the X platform stating that since the beginning of 2026, foreign investors have withdrawn more than $100 billion from the South Korean stock market.
South Korean think tank: Chip boom offsets manufacturing weakness, South Korean economy still on recovery track
According to Odaily Odaily, a South Korean official think tank stated on Wednesday that the South Korean economy remains on a recovery track, with the booming chip industry offsetting the overall slowdown in manufacturing. The Korea Development Institute (KDI), in its monthly economic assessment report, noted that South Korea's exports continued their "strong" expansion, driven by robust demand related to artificial intelligence. South Korea's monthly exports surpassed the $100 billion mark for the first time in June, reaching $102.25 billion, a year-on-year increase of 70.9%, setting a new record. KDI stated, "Although the growth rate of semiconductor exports has slowed, export value remains strong, supported by continued price increases." Driven by surging demand for memory chips, semiconductor exports nearly tripled to $44.82 billion, marking the first time monthly exports have exceeded $40 billion. However, KDI noted a slight decline in manufacturing output as "the rapid growth momentum in the semiconductor sector has slowed, and other sectors remain sluggish." KDI added that high oil prices and a weakening Korean won against the US dollar could "continue to exert upward pressure on prices, increasing the risk of further interest rate hikes and thus dragging down the recovery in consumption." (Jinshi)
South Korea's Ministry of Finance: Will closely monitor stock market volatility risks
According to Mars Finance, citing Gate data, South Korea's Ministry of Finance stated on Wednesday that Finance Minister Koo Yoon-cheol, following a meeting with the central bank governor and heads of financial regulatory agencies, agreed to closely monitor risk factors that could exacerbate stock market volatility. The Ministry of Finance stated that increased stock market volatility stemmed from profit-taking by foreign investors and institutions, portfolio rebalancing, and changes in expectations for the global AI sector. In early trading today, the South Korean KOSPI index fell as much as 4%, hitting its lowest level since May 20th, before rebounding, driven by a rally in chip stocks. The Ministry of Finance pointed out that increased concentration in the semiconductor industry has become a factor exacerbating financial market volatility.