Key points
- Kospi fell 28.02% from June 19 to July 20, the worst one-month return among 46 major economies.
- That is worse than Russia's RTS index, down 24.21% over the same stretch amid sanctions and war-related pressure.
- Kospi is still up 54.63% since the end of last year, so part of this is giving back an extreme rally.
- Samsung Electronics closed below 250,000 won for the first time in 11 weeks on July 20.
Kospi fell 28.02% in the one month between June 19 and July 20. Out of 46 major economies in the G20 and the OECD, no other market did worse. Not even Russia, whose own stock index is under pressure from sanctions and the cost of financing its war in Ukraine.
How bad the last month actually was
Kospi closed July 20 at 6,516.27, down 304.33 points, or 4.46%, on the day. Measured from its own intraday record high of 9,385.59, the index is down 30.57%. Samsung Electronics fell 4.31% to close at 244,000 won, the first time it has finished a day below 250,000 won since May 4, eleven weeks ago. SK Hynix fell 4.23% to 1,764,000 won. Both the Kospi and the smaller Kosdaq market triggered a sell-side sidecar, a temporary pause on program trading, for a second straight trading day.
The drop traces back to a familiar story on this site. Chinese AI startup Moonshot released a new model called Kimi K3 on July 16, reviving memories of the 2025 "DeepSeek shock." Korean chip stocks, already carrying a heavy weight in Kospi, took the hit hard starting July 17.
Worse than every other major market
The S&P 500 fell just 0.57% over the same one-month stretch. Taiwan's Taiex fell 8.17%. Japan's Nikkei 225 fell 9.98%. China's Shanghai Composite fell 7.98%. Russia's RTS index, weighed down by sanctions, stalled peace talks, and the rising cost of financing the war in Ukraine, still only fell 24.21% to its lowest level in three years and four months, less than Kospi.
The rally this month is unwinding
Measured from the end of last year, Kospi is still up 54.63%, well ahead of the S&P 500's 17.4% and the Nikkei's 26.7% over the same period. The first half of 2026 was an unusually strong run for Korean stocks, and some of what happened in the past month is simply that run giving part of itself back.
But analysts say profit-taking alone does not explain a drop this deep. A few things made it worse. Kospi leans heavily on semiconductor stocks, which took the brunt of global worry about AI chip demand. The Bank of Korea also raised its base rate on July 16, to 2.75%, its first increase in three and a half years. Most of that move had already been expected, though, so it added to the mood without being the main reason stocks fell that hard. Korea's own leverage-product market, the same single-stock leveraged ETFs this site has written about before, did more to explain it, adding forced buying and selling on top of the ordinary moves. Reuters wrote on July 16 that Korea's large-scale selling, with historic levels of volatility, reflects how much high-risk leverage products domestic retail investors now use, and that foreign money is unlikely to come back easily while this kind of turmoil continues.
What Korean analysts are saying now
Han Ji-young, an analyst at Kiwoom Securities, said the combination of profit-taking after the first half's rally and leverage-driven supply and demand shocks is weakening the market's underlying strength, but expects Kospi to stop falling somewhere in the low to mid 6,000s. Lee Kyung-min at Daishin Securities pointed to valuation instead, noting Kospi's 12-month forward price-to-earnings ratio has fallen to just 5.81 times, a historic low. His view is that because Kospi entered its correction phase before other global markets did, it may also lead the way back out of it.
Whether either analyst turns out right will become clear soon, in whether Kospi holds near 6,500 in the coming days or falls further toward the price levels that would finally ease the pressure from leveraged bets on this market.
Sources
- JoongAng Ilbo (중앙일보, Korean language): 코스피 한달새 28% 폭락, 46개국 중 최하위
- Reuters, quoted via JoongAng Ilbo, July 16, 2026
- Financial News (파이낸셜뉴스, Korean language): Bank of Korea base rate decision and market reaction, July 16, 2026
- TASS: Russian stock market moves and analyst commentary, July 2026
- Index and stock price data via Korea Exchange, as reported July 20-21, 2026
This is general market commentary and not investment advice. Always do your own research and consider speaking with a licensed financial professional before making any investment decision.
