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.
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….
— Heisenberg (@Mr_Derivatives) October 20, 2026
It’s been rough lately. Remember a lot of the traders there are on leverage too. Exacerbating the situation… pic.twitter.com/1BjjCSYQmY
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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