Investing.com — South Korean stocks are struggling to attract buyers as enthusiasm for artificial intelligence-related investments fades, triggering heavy foreign outflows and a sharp decline in trading activity. <\/p>\n
Before you buy NVIDIA: our AI model’s stock picks are beating the market by 120%+. See the list now \u00bb<\/a> <\/p>\n Trading turnover in South Korea’s $4.3 trillion equity market has plunged 70% from its late-May peak, while the benchmark Kospi has fallen 22% in the second half of 2026, according to Bloomberg. <\/p>\n The reversal follows a first-half rally that made the Kospi the world’s best-performing major equity benchmark, driven largely by demand for AI memory chips. <\/p>\n Samsung Electronics and SK Hynix, which together account for more than half the index’s weighting, have become a source of vulnerability as investors question whether the semiconductor boom can continue. <\/p>\n Foreign investors have withdrawn $131 billion from Korean equities this year, the largest outflow among major Asian markets, according to exchange data compiled by Bloomberg. <\/p>\n Concerns over demand were evident when Samsung shares declined Thursday despite the company reporting a nearly ninefold increase in quarterly operating profit. <\/p>\n Not finding the right stocks? Our AI’s list of investor-grade stock picks for October just dropped \u00bb<\/a> <\/p>\n Market support from corporate share repurchases is also weakening. Samsung and SK Hynix are approaching completion of combined buyback programmes worth 55 trillion won ($41 billion). <\/p>\n Retail participation has similarly declined following July’s selloff. <\/p>\n Outstanding margin loans have fallen to approximately 33 trillion won from a June peak of 38.6 trillion won, while brokerage deposits have dropped to around 100 trillion won from nearly 140 trillion won. <\/p>\n Investors are increasingly favouring Taiwan, whose technology sector offers broader exposure to the AI supply chain. <\/p>\n Taiwan’s Taiex has gained 70% this year, outperforming the Kospi by approximately 23 percentage points last quarter. <\/p>\n UBS Global Wealth Management said it prefers Taiwan equities for tactical AI exposure, citing the market’s diversified technology hardware ecosystem and strong capital spending by major technology companies. <\/p>\n Despite the downturn, South Korea remains among 2026’s stronger-performing markets overall, supported by earlier gains and expectations of continued AI infrastructure investment. <\/p>\n Original Article <\/p>\n Foreign investors flee South Korean stocks as AI boom loses steam<\/a> <\/p>\n Infosys sees no material impact from U.S. PERM suspension<\/a> <\/p>\n