KOSPI deepens losses, falling 6.2% as selling pressure intensifies

South Korea’s Kospi index deepened its losses on Wednesday, falling as much as 6.2% intraday amid intensifying selling pressure driven by valuation concerns and global market volatility. The index eventually pared some of its losses by the close, ending the session down 2.9%, steepest drop since August 2025. The sharp decline was led by the index’s largest components, including Samsung Electronics and SK Hynix, which both fell more than 10% at one point during the session.

The sell-off was exacerbated by heavy foreign investor outflows, with pulling $13.2 billion from Korean equities last week alone. This selling pressure came after the Kospi surged past 8,000 in recent weeks, fueled by AI-linked stocks and chipmakers. The Korea Exchange temporarily halted program trading after Kospi 200 futures plunged more than 5%, triggering a volatility-curbing mechanism.

Despite the sharp decline, analysts noted that no major fundamental warning signs have emerged, and some see the drop as a healthy correction following a 20% surge in October. Retail investors, however, appeared to take advantage of the dip, injecting 2.6 trillion won ($1.8 billion) into the market in the afternoon. The won also weakened against the dollar as foreign investors continued to offload local assets.

The Kospi’s volatility reflects stretched valuations in tech-heavy markets and growing unease over global financial conditions. While the market remains vulnerable to further corrections, analysts suggest that earnings prospects and structural reforms in South Korea could support a rebound in the near term.