The Korea Composite Stock Price Index (KOSPI) opened Tuesday with a 3.5% decline. This drop reduced the index's gains for 2026 to approximately 31%, a significant decrease from the 116% peak recorded in June. Currently, the index is trading about 39% below its June record high.
The downward trend accelerated in recent months, with a 22% loss in July and a 17% decline in October through the 16th. Market pressure intensified as foreign investors shifted to net sellers, leading to seven consecutive sessions of losses ending on October 15. On that day, the index fell 7.57% to 5,554.22 following US inflation data.
The performance of the index is heavily tied to major memory chipmakers, Samsung Electronics and SK Hynix, which represented 44% of the index in May. Between October 1 and October 16, these stocks declined by 19.74% and 28.38% respectively. Concerns regarding AI-related capital expenditures have also impacted market sentiment.
Leverage among traders has exacerbated the volatility. Margin loans reached a peak of 38.63 trillion won on June 24. Furthermore, forced liquidations by brokers exceeded 50 billion won for four consecutive days leading up to October 16. On Monday, the index rose 1.76% to 5,768.01 before the latest slide.
