South Korea’s government turned the world’s hottest stock market into a political trophy. Now, a reversal that’s wiped out more than a trillion dollars in value is stirring a retail investor backlash and testing public faith in its leaders. Frustration is acute among individuals who say they heeded the government’s call to favor the equity market over real estate, as officials championed the Kospi’s artificial intelligence-fueled surge to a record high in June.
As things stand, the benchmark has plummeted over 40% since then amid an unraveling global tech rally, while property prices in Seoul have climbed for a record 91 straight weeks. On Friday, as the Kospi slumped below the 5,000 level that President Lee Jae Myung touted during his election campaign, retail investors vented frustration and mocked Lee’s pledge on online stock forums.
Overall, about $1.7 trillion has been eroded from the market value of Korean stocks since a peak of $5.1 trillion on June 22, data compiled by Bloomberg show. That’s before taking into account Friday’s losses. The Kospi plunged as much as 8.8% on Friday to 4,911.28, before paring about half the loss.
For Korean day traders, the grievance is that the government made the Kospi’s rise a showcase for its economic agenda even as much of the rally was being powered by the broader AI boom.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing