KOSPI Falls 22% in July, Losing $1.59 Trillion; Retail Investors Buy $4.6 Billion in US Stocks
South Korea's benchmark KOSPI index fell 22% in July, its steepest monthly decline since the 2008 global financial crisis, erasing 2,257.8 trillion won (about $1.59 trillion) in market value. The index has dropped more than 30% from its June peak. Retail investors bought $4.6 billion of US stocks during the month, well above the 2025 monthly average of $2.7 billion. Samsung Electronics and SK Hynix accounted for 76% of the market value losses amid concerns over AI capital spending.
South Korea's stock market rout has pushed retail investors toward US equities. In July, the benchmark KOSPI index fell 22%, its steepest monthly decline since the 2008 global financial crisis. Retail investors bought $4.6 billion of US stocks during the month, far exceeding the 2025 monthly average of $2.7 billion. Korean retail investment in US stocks more than tripled in 2025 from the prior year.
This marked the first time since February 2026 that Korean retail purchases of US stocks surpassed purchases of domestic shares. The KOSPI has fallen more than 30% from its June peak. The Korean market has lost 2,257.8 trillion won (about $1.59 trillion) in value, with Samsung Electronics and SK Hynix accounting for 76% of the decline. Concerns over the sustainability of AI capital expenditure and intensifying competition have weighed on chip stocks.
During the same period, the US Nasdaq index was broadly unchanged. Heavy trading in high-leverage ETFs amplified market volatility. On Friday, the KOSPI closed down 0.60% at 6,258.77 points, bringing its weekly loss to 5.1% and marking a seventh consecutive weekly decline, the longest losing streak since December 2022.