South Korea stock selloff wipes out $2 trillion as KOSPI plunges 33%
South Korea just lived through one of the sharpest stock market reversals investors have seen in years, and the numbers tell a brutal story. Foreign investors pulled roughly $13 billion out of Korean equities in July 2026 alone, deepening a South Korea stock selloff that had already been building for months. Yet inside that wave of capital flight, something unusual happened: global funds kept buying the country’s two biggest chipmakers, even as everything else got dumped.
Key takeaways
- Foreign investors withdrew about $13 billion from South Korean equities in July 2026 alone.
- The KOSPI index fell roughly 33% from its June peak through late July, wiping out around $2 trillion in market value.
- Cumulative foreign net selling reached about $81 billion in the first half of 2026.
- Samsung Electronics and SK Hynix, which together account for over half of KOSPI’s market value, still drew selective buying from global funds.
- Leveraged single-stock vehicles and margin calls among Korean retail traders amplified the crash beyond fundamentals.
Historic Foreign Capital Flight Triggers KOSPI Crash
South Korea’s benchmark index suffered one of its steepest drawdowns in recent memory, and foreign investors were the ones pulling the trigger. The scale of the exit, both in July and across the first half of the year, shows this was not a short-lived panic but a sustained retreat from Korean assets.
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