South Korean Stocks Crash as AI Investment Doubts Mount

South Korean stock markets experienced a severe sell-off on July 29, 2026, triggering circuit breakers and trading suspensions for a second consecutive day. The benchmark Kospi index fell as much as 10 percent, contributing to a two-day total decline estimated between 18 percent and 21 percent. The Kosdaq index also slid over 8 percent, causing a 20-minute trading halt.

SK Hynix and Samsung Electronics drove the crash as investors questioned the long-term returns of AI-related investments. Shares of SK Hynix dropped between 13 and 15 percent after the company reported a six-fold profit surge but failed to provide sufficient details regarding shareholder returns and long-term contracts. Samsung Electronics also saw significant losses ahead of its scheduled earnings report on July 30.

Market instability was further exacerbated by retail investors selling approximately 1.7 trillion won in holdings. Additionally, rising oil prices linked to military tensions between the United States and Iran contributed to the overall volatility.