KOSPI Plummets Amid AI Concerns: Experts Warn of Continued Volatility

The KOSPI, South Korea's benchmark stock index, has seen significant fluctuations in 2026 due to investor concerns over AI sustainability. Despite capital expenditures among top hyperscalers growing rapidly, the KOSPI has declined sharply.

Economist Steve Hanke noted on X that the KOSPI is now the most volatile index in the world, surpassing even Bitcoin's volatility. This volatility has been fueled by the government's efforts to channel household savings into domestic equities and reduce capital outflows from overseas investments and property.

The Direxion Daily South Korea Bull 3X Shares (KORU) ETF has seen a nearly 8% increase in the overnight session, while the KOSPI was down about 5% at the open. Lale Akoner, global market analyst at eToro Group Ltd., stated that this is a textbook example of a crowded trade meeting leverage.