South Korea’s KOSPI opened higher on Wednesday as bargain hunters returned after the previous session’s historic decline. The benchmark gained 65.45 points, or 1.09 per cent, to begin trading at 6,089.11, but the recovery quickly disintegrated as investors resumed selling semiconductor shares.
Buyers attempt an early recovery
The positive opening followed a 10.84 per cent fall on Tuesday, when the KOSPI closed at 6,023.66. That collapse was driven by concerns about artificial intelligence investment, semiconductor valuations and increasing competition from Chinese manufacturers.
The scale of the decline encouraged some investors to return at Wednesday’s opening in search of heavily discounted shares. The initial rise suggested that the market could stabilise after one of its most dramatic sessions of the year.
That optimism proved short-lived.
The KOSPI reversed its opening gains and fell sharply during the morning. The decline reached approximately 5 per cent before accelerating further, eventually triggering emergency market mechanisms as the index dropped by around 8 per cent.
The reversal demonstrated that investors remained unwilling to treat Tuesday’s collapse as an isolated correction.
Record profit fails to satisfy investors
SK Hynix remained at the centre of the turmoil. The memory-chip producer reported that quarterly operating profit had increased almost sixfold from a year earlier to a record 60.5 trillion won.
Despite the extraordinary growth, the result remained below analysts’ already elevated expectations. Investors were also looking for clearer evidence that enormous spending on AI infrastructure would continue producing equally rapid profit growth.
SK Hynix shares fell as much as 12.6 per cent during the session. Samsung Electronics, another heavily weighted KOSPI constituent, dropped by approximately 8 per cent.
Concerns have expanded beyond individual earnings reports. Investors are questioning the sustainability of global AI expenditure, the possibility of excess semiconductor capacity and the rapid progress being made by Chinese memory-chip manufacturers.
South Korea’s dependence on semiconductors made the market particularly vulnerable to the changing mood. The KOSPI had previously been one of the strongest-performing major indices, supported by demand for high-bandwidth memory used in advanced AI systems.
External pressure adds to volatility
Wall Street provided little direction before the Seoul opening. The Dow Jones Industrial Average gained 1.03 per cent overnight, while the technology-heavy Nasdaq declined 0.22 per cent.
Attention is now turning to earnings from Microsoft and Meta, which could either restore confidence in AI-related investment or intensify concerns that spending has moved ahead of sustainable returns.
Investors are also waiting for the Federal Reserve’s interest-rate decision. Fresh instability in the Middle East pushed oil prices sharply higher, adding another inflationary risk to an already uncertain outlook.
Wednesday’s brief opening rebound showed that buyers were prepared to test the market. Its rapid collapse, however, confirmed that confidence in South Korea’s semiconductor-led rally remains deeply fragile.
Newshub Editorial in Asia – July 29, 2026
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