KOSPI Falls Over 4% as Trading Resumes After Holiday, Deepening Bear Market

WikiBit|2026-07-20

Abstract:South Korea's KOSPI reopened lower on July 20 after a holiday, falling over 4% and entering a technical bear market as the index dropped more than 25% from its June peak. Chip stocks such as Samsung Electronics and SK Hynix plunged over 5% on reopening, pressured by competition from Chinese AI models and a 4.3% drop in the Philadelphia Semiconductor Index. Foreign investors net bought 278.4 billion won in electronics stocks while retail investors net sold 300.8 billion won. The won weakened to 1,488.3 per dollar amid escalating US-Iran tensions and rising oil prices, adding import-price pressure after the Bank of Korea's rate hike. Analysts view upcoming US hyperscaler earnings from Alphabet, Microsoft, Meta, and Amazon as the next catalyst for chip stocks.

South Korea‘s KOSPI index reopened lower on July 20, its first session since Friday’s Constitution Day holiday. The index slid as low as 6,498 points before paring some losses.

The drop pushed the index more than 25% below its June peak, meeting the threshold for a technical bear market. Chip-sector jitters compounded with an escalating US-Iran conflict to drive the slide.

Chip Stocks Swing Hard on Reopening

Samsung Electronics and SK Hynix stock both opened down more than 5% before foreign investors moved in. The Philadelphia Semiconductor Index shed 4.3% while Korean markets stayed shut for the holiday last Friday. Rising competition from Chinese AI models added further pressure on the memory chip trade.

After not trading last Friday, the Kospi returned today, dropping sharply from its last close. Image Source: Trading View

Foreign investors net bought 278.4 billion won ($187.1 million) in early trading, concentrated in electronics stocks. Retail investors net sold 300.8 billion won over the same window. Han Ji-young, a researcher at Kiwoom Securities, said the decline reflects how far leading stocks have fallen.

“Since July, the KOSPI has dropped by about 25% from its peak, entering a technical bear market. A sharp decline of 30–40% in leading stocks such as Samsung Electronics, SK Hynix, and Samsung Electro-Mechanics is amplifying the sense of decline.”

Won Slides as Middle East Risk Builds

The won-dollar rate opened at 1,488.3, extending its slide while oil prices climbed on fears that the conflict could disrupt the Strait of Hormuz. The stronger dollar added to import-price pressure already building after the Bank of Koreas first rate hike since 2023.

Analysts see this week‘s US hyperscaler earnings as the next catalyst. Alphabet reports July 22, with Microsoft, Meta, and Amazon following before month’s end. Their capital spending outlooks could determine whether chip stocks find a floor or extend the slide.

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