South Korean stock market sees historic rebound after volatility

The South Korean stock market experienced extreme volatility this week, culminating in a historic single-day rebound of nearly 17% on Friday, July 31, 2026. This surge followed a sharp decline that saw the KOSPI index lose 40% of its value since reaching a record high of 9,386 points on June 19, 2026. The initial downturn, which saw the index drop to 7,247 points by July 8 and continue falling, was driven by concerns over high debt levels and the bursting of a valuation bubble in the semiconductor sector.

Major technology firms led both the decline and the recovery. SK Hynix and Samsung Electronics surged by 28% and 26% respectively on Friday, bolstered by renewed investor optimism regarding artificial intelligence and memory chip demand. The rally was further supported by a $3.2 million stock purchase by SK Group chairman Chey Tae-won. Analysts suggest that the preceding three-day slide, which wiped out 17% of market value, was a temporary correction rather than a long-term structural collapse, as companies signaled new investment plans for technology projects.