South Korean retail investors quit market after July Kospi crash

In July 2026 the KOSPI fell 22% for the month, the steepest decline since the global financial crisis. South Korean retail traders, who had poured about 78 trillion won (US$54 billion) into the market during May and June, sold a record volume of shares after the index’s sharp rebound and subsequent drop.

The sell‑off was amplified by the recent launch of single‑stock leveraged ETFs, which critics say turned the market into a “casino”. Four circuit‑breaker halts were triggered – a record for the index. Retail investors blamed President Lee Jae Myung’s stock‑market reform drive and the leveraged‑ETF products for the volatility.

Individual investors voiced their frustration: Kim Han‑kyung, a Seoul resident, said she will never invest in Korean stocks again, while Lee Jung‑min, who borrowed 50 million won against his apartment to trade, accused the government of “fueling the fire”. The KOSPI’s two biggest components, Samsung Electronics and SK Hynix, together account for more than half of the index and also suffered steep losses.