South Korea's July market rout triggered a broad shift into safer and shorter-term financial products, with bank time deposits rising by 42.3 trillion won and money market funds increasing by 27.2 trillion won as the KOSPI fell more than 22% over the month. The Bank of Korea's July 2026 Financial Market Trends report said individual net buying of domestic stocks collapsed from 52 trillion won in June to 3.4 trillion won in July, while equity fund balances dropped by 56.2 trillion won as falling share prices eroded net asset values. The central bank linked the stock correction to concerns over AI-related industries, uncertainty around the Middle East, and continued foreign investor selling. Even so, bargain-hunting demand persisted, with fresh inflows of 11.4 trillion won into equity funds and 8.4 trillion won into derivative funds. The selloff also cooled debt-fueled investing, helping narrow household loan growth to 5.4 trillion won in July, although the Bank of Korea said lending still remained above normal seasonal levels and future demand is hard to predict because housing conditions and real-estate policy changes could have mixed effects.