started · updated
South Korea's KOSPI rebounds after AI rally amid sharp volatility
In July‑August 2026 South Korea’s KOSPI index swung dramatically. After a 41 % plunge from its June peak, the index surged 14‑18 % in a single session on Friday, driven by a rally in AI‑related chip stocks following stronger‑than‑expected Microsoft earnings. Samsung Electronics and SK Hynix led the gains, jumping more than 20 % each.
Extreme price swings were amplified by single‑stock leveraged exchange‑traded funds, which collapsed from about $50 billion to $17 billion in assets. The volatility spike triggered four 20‑minute circuit‑breaker halts and pushed 30‑day volatility to 97 % – the highest level since 1990. Retail investors blamed the leveraged ETFs, many vowing to exit domestic equities, and regulators temporarily suspended new leveraged‑ETF issuances.
Morgan Stanley upgraded South Korean equities to overweight, forecasting roughly a 36 % upside and a 9,000‑point KOSPI target. Global investors responded, buying about $5‑7 trillion of Korean stocks, while the rally later faded and chipmakers fell 5‑7 % on August 3, pulling emerging‑market indices lower. Regional markets in Japan, Taiwan and China moved in tandem, and oil prices fell after U.S.‑Iran diplomatic talks.
Entities
KOSPI · KOSPI · Microsoft · Morgan Stanley · SK Hynix · Samsung Electronics · South Korea · South Korean retail investors
Claims
What the coverage asserts, and how many sources carry each claim.
- [○ 1 SOURCE] Samsung warned that a global chip supply shortage could persist until 2028. news.cnyes.com
- [● 3 SOURCES] Samsung Electronics reported operating profit growth of roughly 1,800% year‑on‑year in the quarter. news.cnyes.com · coinpaper.com
- [● 5 SOURCES] KOSPI fell 22.2% in July, the steepest monthly decline since the global financial crisis of 2008. emmepress.com · www.koreatimes.co.kr · coinpaper.com · www.memesita.com
- [● 2 SOURCES] Retail investors blamed leveraged exchange‑traded funds for the extreme volatility and many vowed not to invest again. emmepress.com · www.memesita.com
- [● 2 SOURCES] SK Hynix posted a six‑fold increase in operating profit, a 557% rise year‑on‑year. coinpaper.com
- [● 3 SOURCES] Circuit‑breaker halts were triggered four times in July as the KOSPI’s 30‑day volatility reached 97.13 percent, the highest since 1990. www.memesita.com · coinpaper.com · emmepress.com
- [○ 1 SOURCE] Microsoft’s earnings beat expectations, prompting a 14% rise in the KOSPI on AI‑chip stock rally. enterprisewired.com
- [● 2 SOURCES] South Korea’s semiconductor exports rose 179% year‑on‑year in July. news.cnyes.com · www.memesita.com
- [● 2 SOURCES] Retail investors blamed leveraged exchange‑traded funds for the market turmoil and said they would avoid equities. www.memesita.com · emmepress.com
- [● 2 SOURCES] SK Hynix fell about 21 percent in July then rose about 24.6 percent during the rebound. www.memesita.com · enterprisewired.com
- [● 4 SOURCES] The KOSPI fell 22 percent in July 2026, the steepest monthly decline since the 2008 global financial crisis. www.memesita.com · www.koreatimes.co.kr · emmepress.com
- [● 2 SOURCES] Microsoft’s earnings beat expectations, boosting AI‑chip stocks and helping the KOSPI rally up to 14 percent. enterprisewired.com · www.memesita.com