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South Korean Kospi rebounds after AI-driven surge and sharp selloff
The Kospi more than doubled to above 9,000 points in mid-June before plunging to about 5,500 within weeks, then recovering to roughly 6,800.
South Korea's Kospi, a tech-heavy benchmark, has shown sharp swings after an AI-driven rally and subsequent correction, with personal investors reporting large losses. BBC Business reports that bank worker Yongjoon Kim lost 20 million Korean won, about $14,000, last month after investing money he had planned to use for a home purchase as he prepares to marry later this year.
The outlet links the volatility to a surge of global interest in artificial intelligence that fueled rapid gains and setbacks for the country's biggest chipmakers. Between June and August, the Kospi suffered one of the sharpest corrections in its history, according to BNY financial services representative Wee Khoon Chong, with the index rising above 9,000 points in mid-June before falling to about 5,500 within a few weeks, then recovering to around 6,800.
BBC Business says concerns about the scale of spending on AI contributed to the recent selloff. It also describes how the downturn hit investors who had bought tech stocks over the past year, including Woongsa Kim, who bought SK Hynix shares with about half of a work bonus and saw the stock quadruple before much of the gains were wiped out, leaving his investment worth about 300 million won, roughly half the peak value.
The story also highlights leverage as a factor amplifying losses for some traders. Tobias Reger, an investment analyst, says extreme euphoria after months of tech gains pushed some investors to take out loans to invest, and that leveraged positions can magnify outcomes when prices turn quickly.
Latest closeKospi 6,579.04 ▲3.7%