Economy News

Kospi crashes about 11% in a day as the AI chip trade unwinds; $2.18tn gone in two days

South Korea's Kospi index fell about 11% on Tuesday 28 July as SK Hynix and Samsung Electronics each dropped more than 10%, The Guardian reports, taking the market to its lowest since mid-April. The rout continued on Wednesday: Al Jazeera says the Kospi fell as much as 12.6% before closing down 6%, wiping about $2.18tn off Seoul's market over two sessions. The slide has erased almost 40% of the index's value from a peak little more than a month ago.

The selling spread to US chipmakers, with Intel, AMD and Sandisk down more than 4%, while Apple briefly became only the second company worth more than $5tn as investors looked for shelter. In Seoul, Finance Minister Koo Yun-cheol apologised to lawmakers for introducing single-stock leveraged ETFs, and the government promised curbs including investor limits.

“It's very difficult to say when will this selloff end.” — Frank Benzimra, Societe Generale, via Al Jazeera

How each outlet framed it

• The Guardian — fears over AI borrowing and “circular funding”, plus a report that China has begun mass-producing its own DUV chip-making tools; Morningstar called the sell-off “largely a kneejerk reaction”.
• Al Jazeera — a leverage unwind in a retail-driven market, with Pictet seeing “signs of panic and forced unwind” across Asian tech.
• AP — the scale of the drop, a fall of more than 10% for the Kospi on heavy selling of chipmakers.

Where the numbers differ: The Guardian puts Tuesday's fall at 11.5%; Al Jazeera calls it a near-11% rout. Even after the crash, Al Jazeera notes, the Kospi was still up 41.5% this year in dollar terms, the best-performing major market.