JAKARTA — South Korean financial markets experienced a brutal sell-off on Friday, May 15, 2026, as the Korea Composite Stock Price Index (Kospi) plummeted by 6.12 percent.
According to Yonhap News Agency, the Kospi tumbled 488.23 points to close at 7,493.18. This sharp reversal followed an optimistic start to the session, during which the index reached a record intraday high of 8,046.78.
The dramatic downturn brought a swift end to the historic rally fueled by global artificial intelligence (AI) euphoria. After the Kospi breached the psychological 8,000-point threshold for the first time, foreign investors aggressively offloaded blue-chip holdings, most notably Samsung Electronics and SK hynix.
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“This steep correction effectively erased the gains of a historic rally that had been driven by skyrocketing interest in AI-related technology and semiconductor stocks,” Yonhap reported.
Market analysts attribute the collapse primarily to widespread profit-taking. Large-cap technology stocks, which had been the primary engine behind the market’s recent surge, were hit the hardest as investors sought to lock in gains.
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Foreign investors were the primary drivers of the selling pressure, posting a net sell-off of 5.6 trillion won—marking their seventh consecutive day of divestment. Institutional investors also joined the exodus, dumping 1.7 trillion won in stocks, while retail investors moved in to absorb the pressure, purchasing 7.2 trillion won in equities to capitalize on the dip.
Lee Kyoung-min, an analyst at Daishin Securities, noted that the conclusion of the first-quarter 2026 earnings season intensified short-term profit-taking, as market expectations for corporate performance appeared to have peaked. Furthermore, resurfacing geopolitical tensions have begun to weigh heavily on global market sentiment.
International reports indicate that U.S. President Donald Trump, following a state visit to China, signaled a hardening stance toward Tehran. This rhetoric has reignited fears of a broader conflict involving the United States, Israel, and Iran, subsequently driving up global oil prices.
These mounting external pressures have deepened investor anxiety regarding the outlook for Asian markets, particularly South Korea, whose economy remains heavily reliant on the export-driven technology sector.
Summary
The South Korean Kospi index experienced a significant 6.12 percent decline on May 15, 2026, ending a historic rally driven by artificial intelligence optimism. This sharp correction was primarily fueled by foreign investors offloading massive holdings in key technology stocks, including Samsung Electronics and SK hynix. Despite retail investors purchasing 7.2 trillion won in equities, heavy selling by foreign and institutional investors forced the index down from a record intraday high to close at 7,493.18.
Analysts attribute the market collapse to aggressive profit-taking following the end of the first-quarter earnings season. Furthermore, the sentiment was negatively impacted by resurfacing geopolitical tensions involving the United States and Iran, which have raised concerns regarding global stability and oil prices. These external pressures have created significant uncertainty for South Korea’s export-reliant technology sector, tempering expectations for near-term growth.
