South Korea's KOSPI falls into bear market, AI demand wanes

South Korea's stock market entered a bear market on Wednesday, July 8, 2026, as the benchmark KOSPI index plunged more than 20 percent from its recent peak, capping a dramatic reversal for a market that had been a global leader earlier in the year. The index fell approximately 5.5 percent to close around 7,231, marking one of its sharpest single-day declines of 2026 and officially crossing the bear market threshold.

The selloff was driven by a broad reassessment of the artificial intelligence investment boom that had fueled an unprecedented rally. The KOSPI had nearly doubled year-to-date at points, driven almost entirely by soaring memory chip demand, before recent volatility erased those gains. The decline intensified following a global technology rout and was concentrated in the semiconductor sector, despite blockbuster earnings from industry leaders.

Samsung Electronics and SK Hynix, which together account for roughly half of the KOSPI's market capitalization, led the downturn. Samsung shares fell nearly 4 percent on Wednesday, extending losses from the previous day even after the company reported a preliminary second-quarter operating profit of 89.4 trillion won, a nearly...