The volatility of South Korea's benchmark stock index has become so extreme that investors and analysts are comparing its wild intraday swings to the frenzy seen in internet meme stocks.
While this comparison might initially seem exaggerated, given that the KOSPI index is supported by strong earnings from global leading chipmakers, it is not entirely without merit. The growing interest from retail investors has led to the benchmark index closing with a gain or loss of at least 5% on 20 occasions so far this year, including a plunge of 10% on Tuesday. In contrast, such moves occurred only twice in 2025. This pattern is reminiscent of the 2021 mania surrounding stocks like GameStop Corp. and Bed Bath & Beyond Inc., which became the focus of intense retail investor speculation.
The KOSPI index surged as much as 6% again on Thursday after an optimistic forecast from Micron Technology reignited confidence in the artificial intelligence sector.
A significant factor driving the surge in market volatility is the substantial buying of leveraged single-stock exchange-traded funds (ETFs) by retail investors. Furthermore, the increasing dominance of the two largest stocks by market value, Samsung Electronics and SK Hynix, is also amplifying market swings. These two companies now account for nearly 60% of the KOSPI index's total market capitalization.
"As we move into 2026, the Korean KOSPI index is beginning to exhibit meme-stock-like strength in its movements," said Hebe Chen, a market analyst at Vantage Global Prime in Sydney. "Samsung and SK Hynix wield enormous influence, and leveraged products can mechanically magnify every move in the market. Coupled with the fact that there are too few targets for capital to chase in this market, every fluctuation in AI sentiment can rapidly escalate into an exponential event."
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