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2026-07-13 18:06:10
[South Korean Stock Market Volatility Soars to Peak Since 1998; Index Plunges 28% from Peak After AI Boom Fades] ⑴ Driven by the artificial intelligence boom, the South Korean stock market previously benefited significantly. However, the market's volatility has now surged to levels seen during the worst of the 1998 Asian financial crisis. The 60-day price volatility indicator for the MSCI Korea Index has reached its highest point since February 1998, even surpassing the peak volatility during the 2008 global financial crisis. ⑵ Previously, driven by frenzied trading sentiment and large amounts of leveraged funds, the MSCI Korea Index climbed to a historical high. However, with a sharp reversal in market sentiment, the index has fallen 28% from its June high, and on Monday it suffered a single-day plunge of 10%, returning to levels seen more than two months ago. ⑶ The sudden surge in volatility and the rapid decline in the index form typical characteristics of risk release. The pressure to reduce leveraged funds and investor panic reinforced each other, resulting in an unusually steep downward slope in the market. (4) The focus of attention going forward is whether South Korean regulators will introduce stabilization measures, and the transmission effect of changes in the global AI industry chain on core sectors such as South Korean semiconductors. Market stabilization will depend on volatility indicators gradually declining from extremely high levels.
