South Korea's KOSPI rallies on semiconductor surge and foreign buying

In July 2026 South Korea’s benchmark KOSPI index surged repeatedly, climbing more than 5 % in a single session and breaking the 7 100‑point barrier. The rally was led by major semiconductor makers – Samsung Electronics and SK Hynix – which posted gains of 5‑9 % as U.S. chip stocks rallied on strong earnings and AI‑related demand. Foreign investors were the main catalyst, net‑buying roughly 2‑10 trillion won of equities, while domestic retail and institutional participants sold, creating a pronounced buying‑selling imbalance.

The rapid price moves triggered the Korea Exchange’s automatic “buy‑sidecar” mechanism and, on several occasions, a five‑minute trading halt to curb algorithmic volatility. By mid‑month the sidecar had been activated eleven times, the most in a single month in the market’s history. Analysts linked the rally to expectations of continued AI infrastructure spending, higher U.S. semiconductor exports and a recent rebound in South Korea’s export figures, especially a 180 % jump in semiconductor shipments. The heightened volatility also led many individual investors to sell large positions to lock in gains, while market watchers warned that further rate‑policy moves by the Bank of Korea could temper the rally.

Overall, the episode underscores the sensitivity of the Korean market to semiconductor performance, foreign capital flows and macro‑policy signals.