Foreign investors pull $131 billion from South Korean stocks as AI rally fades

Investing.com·11 Oct 2026·

·Read original

4▲0 ▼2Impact / 5

Price Action Macro Industry Semiconductors & Semiconductor Equipment

000660.KO ▼

005930.KO ▼

Summary · why it matters

Foreign investors have withdrawn $131 billion from South Korean equities this year, the largest outflow among major Asian markets, as enthusiasm for artificial intelligence-related investments fades. 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. 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. Samsung Electronics and SK Hynix, which together account for more than half the index's weighting, have become a source of vulnerability, and Samsung shares declined Thursday despite the company reporting a nearly ninefold increase in quarterly operating profit. Market support from corporate share repurchases is also weakening, with Samsung and SK Hynix approaching completion of combined buyback programmes worth 55 trillion won, or $41 billion, while outstanding margin loans have fallen to approximately 33 trillion won from a June peak of 38.6 trillion won and brokerage deposits have dropped to around 100 trillion won from nearly 140 trillion won. Investors are increasingly favouring Taiwan, whose Taiex has gained 70% this year and outperformed the Kospi by approximately 23 percentage points last quarter, with UBS Global Wealth Management saying it prefers Taiwan equities for tactical AI exposure.

SK Hynix Inc ▼

Samsung Electronics Co Ltd ▼