KOSPI Plunges 44% as AI Rally Fades and Leveraged Positions Face Liquidations

South Korean equities collapse from June highs, with semiconductor giants SK Hynix and Samsung dropping over 50%. Leveraged ETF assets shrink 71.6% amid forced liquidations.

Woofun AI data shows that the KOSPI index declined nearly 44% from its June 19 peak of 9,385.59 points to a July 29 low of 5,262.77 points. Semiconductor sector leaders suffered severe drawdowns; SK Hynix shares fell approximately 57% from 2.987 million won to 1.287 million won, while Samsung Electronics dropped over 49% during the same period.

The reversal triggered significant deleveraging across retail investor portfolios. Assets under management in single-stock 2x leveraged ETFs contracted by 71.6% from their peak levels following their May 27 introduction. Credit financing balances retreated to roughly 27 trillion won, aligning with early 2026 figures. Regulators have subsequently increased investment thresholds for leveraged ETFs to mitigate volatility risks associated with margin call-induced sell-offs.