GoKawiilA man looks at a stock index board showing South Korea's benchmark stock index (KOSPI) after the close of trading in Seoul on July 28, 2026.
South Korea's Kospi has staged a reversal from its latest rout, returning to bull-market territory as investors pile back into the country's semiconductor giants that dominate the index.
The benchmark has climbed more than 20% from its July low, the commonly used threshold for a bull market, after a rout driven partly by leveraged positions and forced selling pushed it into bear-market territory last month.
The speed of the turnaround underscores the massive volatility in tech stocks and raises a bigger question: How much longer will the South Korean rally last?
For bulls, the answer rests largely on whether the fundamentals behind Korea's semiconductor giants can keep pace with increasingly optimistic expectations. Strong U.S. technology earnings and continued commitments to AI infrastructure spending have helped revive confidence that demand for memory chips will remain robust.
"The AI rally and continued strong earnings have been a constant during the sell-off, so it is fundamentals returning the market back to normalcy rather than the other way around," said Peter Kim, head of global investment strategy at KB Securities.
Kim said valuations and earnings were never seriously in doubt during the semiconductor rout, which was instead driven by technical factors and fund flows. The unwinding of leveraged positions has also eased after regulators tightened rules and brokerages normalized margin and risk requirements. That could leave the market on firmer footing than during the run-up preceding the crash.