South Korea’s KOSPI index rebounded by 3.98% [1] in early trading Thursday, allowing the market to escape bear market territory.
The recovery follows a period of extreme volatility in the technology sector. Because the KOSPI is heavily weighted toward semiconductor and AI firms, these swings signal broader investor sentiment regarding the sustainability of the artificial intelligence boom.
The index entered bear market territory on Wednesday after a sharp decline. LSEG data said, "The Kospi fell more than 5% on Wednesday, which brought it 20% [2] below its June 19 record high."
This downturn was driven primarily by a selloff in AI-related chip stocks [3]. The sudden drop put the world's best-performing stock market of the year into a precarious position, reflecting fears that AI growth may have been overpriced.
Despite the volatility in Seoul, some South Korean tech giants continue to see strong international interest. SK Hynix recently pursued a $28 billion [4] U.S. listing. A reporter from beincrypto.com said that this listing drew seven times [5] the demand, even as the KOSPI briefly fell into a bear market this week.
Investors are now watching to see if the Thursday rebound marks a stable floor for the index or if the AI selloff will return. The rapid recovery suggests that some buyers view the recent dip as a buying opportunity rather than a long-term trend.
“The KOSPI index rebounded by 3.98% in early trading Thursday, allowing the market to escape bear market territory.”
The KOSPI's rapid transition into and out of bear market territory highlights the high sensitivity of the South Korean economy to the global AI trade. While the rebound suggests resilience, the volatility indicates that the market is currently prone to sharp corrections based on chip-sector sentiment, making it a bellwether for the global tech cycle.
