South Korea’s KOSPI falls 5%. What’s next
South Korea’s main KOSPI stock index just opened 5% lower. Perhaps more importantly, it also just broke the July lows as the bubble bursts in incredibly quick fashion. It’s now down 30% from the June 18 high of 9106.
It’s been a brutal drawdown over six weeks following an incredible rally from 2300 to 9106 — nearly quadrupling since April 2025. That’s insane volatility in a market that’s notorious for leveraged trading. It was once once of the cheapest markets in the world and remains surprisingly inexpensive on a relative basis. For now though, it’s all about momentum and when you combine a downtrend with leverage, it can quickly become an avalanche.
Technically, I’m watching 5840, which is the 50% retracement of the rally since April 2025 but you could also argue the February interim peak of 6400 didn’t hold and now 5050 (call it 5000) is much more likely and that also corresponds with 61.8%. The old addage applies: Don’t try to catch a falling knife.
The market is falling out of love with chipmakers at the moment and that’s been a big driver of the bull market in South Korea.
