Korean Stocks Plunge 10% Amid Asian Market Rout

The South Korean stock market’s KOSPI index rebounded sharply on June 24, 2026, after a 10% plunge in the prior session—the steepest one-day drop since the 2022 crypto crash—amid a broader tech-sector sell-off that sent Asian markets reeling. The recovery came as investors pivoted back to earnings reports and domestic economic resilience, though volatility persisted as AI-related stocks remained under pressure.

According to Reuters, the KOSPI rose 3.2% on June 24, erasing roughly half of its losses from the previous day, when it tumbled 10.1% to a two-year low. The turnaround reflected a broader Asian market rebound: Japan’s Nikkei 225 climbed 2.1%, while Hong Kong’s Hang Seng advanced 1.8%, though Singapore’s Straits Times Index remained under pressure, down 0.5%. Analysts cited a shift in focus from macroeconomic concerns—including rising U.S. interest rates—to corporate fundamentals, with South Korean firms set to report second-quarter earnings in the coming weeks.

Why did the KOSPI plunge 10% in a single day—and what triggered the rebound?
The sell-off was driven by two key factors, according to Bloomberg and Yahoo Finance Singapore. First, a rout in global tech stocks—particularly those tied to artificial intelligence—dragged down South Korean shares, with SK Hynix, Samsung Electronics, and Naver among the hardest-hit. SK Hynix, the world’s second-largest memory chipmaker, saw its stock fall 12% on June 23, while Naver, South Korea’s dominant search and AI platform, dropped 14%. Second, investors reacted to hawkish signals from the U.S. Federal Reserve, which raised rates by 25 basis points earlier in June, heightening fears of a prolonged economic slowdown.

The rebound on June 24 was fueled by two developments. First, domestic data showed resilience: South Korea’s central bank reported on June 21 that the economy grew 2.3% year-over-year in the first quarter, beating forecasts, while unemployment remained near a decade-low of 2.9%. Second, earnings season loomed large. Samsung Electronics, the country’s largest conglomerate, is scheduled to report Q2 results on June 26, with analysts expecting revenue to dip slightly from a year ago but margins to hold steady amid strong demand for semiconductors in AI infrastructure. "The market is pricing in a rebound once earnings season kicks off," said Park Ji-hoon, a strategist at KB Securities, in a statement to Reuters. "But the tech sector remains fragile until we see clearer signs of stabilization in the U.S."

How does this compare to other Asian markets—and what’s next for the KOSPI?
South Korea’s KOSPI underperformed regional peers in the June 23 rout, but its recovery was more pronounced than in Japan or Hong Kong. While the Nikkei and Hang Seng also rebounded, they did so from shallower declines (down 3.5% and 4.1%, respectively, on June 23). The KOSPI’s larger drop reflected its heavier exposure to tech and AI stocks, which accounted for nearly 40% of its market capitalization as of June 2026, according to data from the Korea Exchange (KRX).

Looking ahead, three risks loom over the KOSPI’s recovery, according to The Straits Times and Bloomberg. First, U.S. Treasury yields remain elevated, with the 10-year note yielding 4.1%—a level that has historically pressured emerging-market equities. Second, South Korea’s won has weakened 5% against the dollar this year, increasing import costs for domestic firms. Third, earnings reports may not fully offset tech-sector weakness. "If AI stocks continue to underperform, the KOSPI could face another correction," warned Lee Seung-tae, chief economist at Shinhan Investment Corp., in a June 24 interview with Reuters. "But if Samsung and SK Hynix deliver strong results, we could see a more sustained rally."

What’s driving the AI stock sell-off—and will it spread to South Korea’s broader market?
The tech sell-off has been led by U.S. AI stocks, with Nvidia’s shares down 20% from their May peak, according to Bloomberg. South Korean investors have followed suit, dumping AI-linked stocks like Naver and Kakao, which saw their market caps shrink by $12 billion and $8 billion, respectively, over the past month. The downturn stems from three factors: slower-than-expected revenue growth at AI startups, rising costs for cloud computing (a key input for AI training), and profit-taking after a 2025 rally that saw AI stocks surge 150% on average.

The impact on South Korea’s broader market is mixed. While tech stocks dominate the KOSPI, consumer and financial sectors—such as Hyundai Motor and KB Financial Group—have held up better, rising 1.5% and 0.8%, respectively, on June 24. "The KOSPI’s recovery is a two-speed market," said Choi Young-jin, a portfolio manager at Mirae Asset Securities, in a statement to Reuters. "Tech is still in correction mode, but the rest of the market is pricing in a soft landing for the Korean economy."

Key figures and dates to watch

• KOSPI performance (June 23–24, 2026):

  • June 23: -10.1% (steepest drop since March 2022)
  • June 24: +3.2% (recovery)
  • Year-to-date: -8.5% (as of June 24 close)

• South Korean earnings calendar (June–July 2026):

  • June 26: Samsung Electronics Q2 results (expected revenue: ₩150 trillion; margin: ~20%)
  • July 3: SK Hynix Q2 results (expected revenue: $12.5 billion; margin: ~18%)
  • July 10: Naver Q2 results (expected revenue: ₩1.2 trillion; margin: ~35%)

• Macroeconomic data (recent releases):

  • Q1 2026 GDP: +2.3% YoY (vs. forecast +2.1%)
  • May unemployment rate: 2.9% (lowest since 2013)
  • Won/dollar exchange rate (June 24): 1,350 KRW/USD (down 5% YTD)

The KOSPI’s volatile swings reflect broader tensions between global tech risks and South Korea’s domestic economic strength. While the rebound on June 24 signals a short-term stabilization, the market’s trajectory will hinge on earnings reports, U.S. monetary policy, and whether the AI sell-off deepens. For now, investors are betting on corporate resilience—but the road ahead remains uncertain.