Day by day, the South Korean stock market is becoming one of the most important global indicators for measuring and tracking the artificial intelligence boom, as its sharp fluctuations begin to spread to Wall Street and global markets.

In Tuesday's trading, the main KOSPI index closed up 3.6% after a temporary halt in automated trading, extending a new series of fluctuations that began after the index's record rise early this year gave way to a sharp decline in recent weeks.

Shares of Samsung Electronics closed up 6.2%, while SK Hynix shares ended trading up 4.1%.

After the Korean market was seen as undervalued compared to its global peers (known as the 'Korea discount'), the country has become the focus of investors as massive spending on artificial intelligence revived profits for chipmakers Samsung and SK Hynix, reshaping the financial landscape of the Korean stock market.

Mon, 13 2026

According to Business Insider, this situation has become a disruption for global markets. Analysts at Evercore ISI wrote: 'What may worry investors more is the extent to which strong moves in Korea are affecting global asset markets in general, and the Nasdaq index in particular.'

Evercore analysts pointed out in a note released Sunday that the correlation between the KOSPI and the Nasdaq 100 has reached 'an astonishing level of 0.95,' and the two markets are moving almost in sync, as investors view South Korea as a bellwether for AI trades.

Meanwhile, Michelle Gibley, director of international equity research and strategy at the Schwab Center for Financial Research, wrote in a Monday note: 'The South Korean market has effectively become a barometer for AI trades.'

Gibley attributed market volatility to the crucial role of memory chips in the AI supply chain, rising profits of chip companies, the high concentration of semiconductor stocks in the Korean market, along with increased use of leverage.

These factors helped push the KOSPI to record levels earlier this year, amid optimism over reforms adopted by President Lee Jae-myung aimed at narrowing the market's valuation gap, or the long-standing 'Korea discount.'

Sun, 19 2026

Furthermore, retail investors amplify these fluctuations by pouring money into leveraged ETFs for specific individual stocks, especially those related to Samsung and SK Hynix, which have doubled the intensity of AI stock volatility in the market.

This has resulted in huge gains and similar heavy losses, triggering the trading halt mechanism on the KOSPI seven times this year.

Evercore analysts commented: 'Korea has become a magnet for investors, where unprecedented memory scarcity meets an unusual investment concentration in its economy and stock market, while risk-on retail investors amplify this concentration through leveraged bets on individual stocks that fuel index prices.'

Wed, 15 2026

The volatility reached levels that prompted South Korean financial regulators to suspend approvals for new leveraged ETFs on individual stocks, in an attempt to curb speculation.

Evercore analysts explained that the 'boom-and-bust' pattern is familiar in major investment themes like AI, adding: 'The decline lasted 6 consecutive weeks, but tech investors recognize this pattern: strong trends overshoot in both directions (up and down), and last longer than investors can financially withstand, especially when using leverage.'

Despite the KOSPI falling 18% over the past month, it remains up 113% compared to last year, and 60% since the start of this year.