South Korean Stocks Fall as AI Bubble Fears Grow

South Korean stocks experienced a two-day slump starting November 18, 2025, driven by aggressive selling from institutional and foreign investors. On Tuesday, the Korea Composite Stock Price Index (KOSPI) plummeted 3.32 percent to close at 3,953.62, marking its first drop below the 4,000 level since November 7. The decline was led by chipmakers and tech giants, with SK hynix falling 5.94 percent and Samsung Electronics dropping 2.78 percent.

Market sentiment was weighed down by diminishing expectations for U.S. Federal Reserve interest rate cuts and growing anxiety over an artificial intelligence bubble. These pressures extended into Wednesday, November 19, as the KOSPI fell another 0.61 percent to close at 3,929.51. Foreign investors contributed to the downturn with net selling totaling 1.05 trillion won. Tech stocks remained weak, while shipbuilding firms HD Hyundai Heavy and Hanwha Ocean saw sharper declines of 4.81 percent and 3.76 percent, respectively.

Concurrent with the equity slump, the South Korean won weakened against the U.S. dollar, trading around 1,465 won. Investors remain cautious as they await quarterly earnings from Nvidia and clearer signals from the Federal Reserve regarding future policy paths.