South Korea’s KOSPI index plunged roughly 40% from its June peak near 9,385 points, wiping out over $2 trillion in market value. This historic decline, driven by the violent unwinding of leveraged retail positions in AI-related semiconductor stocks, peaked on July 28 with a single-day drop of 10.84%. South Korean regulators intervened in mid-to-late July to tighten trading conditions on leveraged ETFs and temporarily halt new issuances of these products. By early August, the KOSPI rebounded 18% in a single session, an extreme move that nonetheless does not offset prior losses, as recovering from a 40% loss requires a 67% gain.
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