AI Jitters Trigger Foreign Investor Exodus from Korean Stock Market

**Foreign Investors Trigger Record Sell-Off on KOSPI Amid AI Bubble Fears**

AI Jitters Trigger Foreign Investor Exodus from Ko...

Seoul – South Korea's KOSPI index experienced a tumultuous week, culminating in a record-breaking sell-off by foreign investors, the Korea Exchange announced on Sunday. Over the first week of November, foreign entities offloaded a net 7.26 trillion won ($4.98 billion) worth of shares, marking the largest weekly exodus of foreign capital in the index's history. This surpasses the previous record of 7.05 trillion won witnessed in the second week of August 2021.

The sudden reversal follows a period

The sudden reversal follows a period of robust growth, where the KOSPI had emerged as the fastest-rising major stock index among G20 nations as of late October. This surge was fueled by significant foreign investment in key sectors, particularly semiconductors and other blue-chip stocks. Data compiled by Yonhap Infomax, the financial arm of Yonhap News Agency, highlighted the strong buying pressure that propelled the index to new heights.

However, the rapid ascent appears to have triggered a wave of profit-taking, exacerbated by growing anxieties surrounding a potential artificial intelligence (AI) stock bubble. Concerns mirroring those felt on Wall Street, which also experienced a downturn last week, contributed to the market jitters.

The KOSPI's volatility was evident throughout the week. After reaching a record high above 4,200 on Monday, the index plummeted nearly 3 percent on Wednesday. While a brief rebound occurred on Thursday, the index ultimately closed the week down 1.81 percent on Friday, falling below the psychologically important 4,000 mark.

The sell-off was heavily concentrated in

The sell-off was heavily concentrated in the semiconductor sector. Samsung Electronics Co., the world's largest memory chip maker, and its rival SK hynix Inc. accounted for over 70 percent of the foreign divestment. This suggests a targeted pullback from companies that have benefited significantly from the recent AI-driven market enthusiasm.

The impact of the foreign sell-off extended beyond the stock market. The local currency, the won, weakened considerably, breaching the psychologically crucial 1,450 won threshold against the US dollar on Friday. This marked the currency's lowest level in nearly seven months, adding further pressure to the South Korean economy.

Analysts are closely watching the situation to determine if this is a temporary correction or the beginning of a more sustained downturn. The future performance of the KOSPI will likely depend on global market sentiment, particularly regarding AI stocks, and the continued strength of the South Korean economy.