The Korea Composite Stock Price Index (KOSPI) fell 3.5% at Tuesday’s open as a chip-led AI sell-off drags on, cutting its 2026 gain to about 31% from roughly 116% at its June record close.
The index now sits about 39% below that peak. The slide gathered pace in July, when it lost 22%, and October has erased another 17% through Oct. 16.
Is the KOSPI Now a Bet on AI Spending?
Memory chipmakers Samsung Electronics and SK Hynix accounted for 44% of the index in May.
However, the pair fell 19.74% and 28.38% between Oct. 1 and Oct. 16, JoongAng reported. Credit worries over AI spending grew after bond prices fell at cloud provider CoreWeave .
Foreign investors turned net sellers , and the index fell seven straight sessions through Oct. 15.
Then stronger-than-expected US inflation data hit on Oct. 15, and the index fell 7.57% to 5,554.22.
The KOSPI has had another rough open. Source: Trading View
Did Borrowed Money Turn a Pullback Into a Rout?
Margin loans , which let investors buy shares with borrowed money, peaked at 38.63 trillion won on June 24.
Forced liquidations , which occur when brokers sell shares from investors who miss payment deadlines, topped 50 billion won for four straight sessions through Oct. 16.
Kospi….
It’s been rough lately. Remember a lot of the traders there are on leverage too. Exacerbating the situation… pic.twitter.com/1BjjCSYQmY
— Heisenberg (@Mr_Derivatives) October 20, 2026
Institutional buying lifted the index 1.76% to 5,768.01 on Monday after a 3.17% lower open, before today’s slide.
Because the index leans on two stocks, its next leg may hinge on whether AI spending plans hold up and foreign selling slows.
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