South Korea's KOSPI closes down 6 percent as Seoul's equity market sheds $2.18 trillion

South Korean stocks dropped for a second consecutive session, with Seoul's equity market losing about $2.18 trillion in value. The benchmark KOSPI fell as much as 12.6 percent on Wednesday, 29 July 2026, before trimming losses to close down 6 percent, extending Tuesday's near 11 percent rout on 28 July 2026. The slide has erased almost 40 percent of the index's value from a peak reached little more than a month earlier, putting the market on course for its steepest monthly drop on record.

The main driver is a sharp drop in investor appetite for chipmakers, which had previously enjoyed strong growth driven by artificial intelligence investment. Finance Minister Koo Yun-cheol apologised during a parliamentary session for the introduction of single stock leveraged exchange traded funds, saying they had not been considered carefully enough.

After a Wednesday evening meeting with the governor of the Bank of Korea and heads of financial regulators, the Ministry of Finance said it would immediately pursue further curbs on single stock leveraged products, including individual investment limits, citing a cap of up to 20 percent of an investor's total investment amount as an example, higher trading costs and simulated trading requirements. Despite the tumble, the KOSPI is up 41.5 percent in US dollar terms so far in 2026.