Analysts say semiconductor earnings, U.S. big tech results and foreign fund flows will shape South Korea's market after a month of circuit breakers and extreme swings.
South Korea's stock market is entering August in recovery mode after the KOSPI swung from a 22.2% monthly drop to its biggest one-day gain on record. Analysts say the next move will depend largely on semiconductor earnings, U.S. big tech results and interest rates, with foreign capital seen as especially important because retail investor sentiment may take longer to recover. The KOSPI fell from 8,476.48 at the end of June to 6,595.45 at the end of July, while a three-day selloff starting July 28 triggered circuit breakers four times in a single month for the first time. Chipmakers were hit by concerns over a peak in the semiconductor cycle, demand worries linked to Meta and the rise of China's CXMT, dragging Samsung Electronics down 21.41% and SK Hynix 35.17%. Sentiment then turned on July 31 after Google (Alphabet), Amazon and Microsoft indicated they would keep expanding AI investment, helping lift the KOSPI 17.91%, or 1,001.89 points, in a single session. Market participants are now watching whether AI spending by big tech can pull semiconductor shares higher again, whether gains spread to other earnings-backed stocks, and whether leadership rotates toward the KOSDAQ market. South Korean regulators are also preparing emergency steps on single-stock leveraged products, which can magnify market moves, by pursuing Capital Markets Act revisions with limits on action deadlines and leverage ratios.