Why has the Korean stock market become more volatile than other markets?

Officials attributed the relatively high volatility partly to Korea’s heavy weighting in AI-related sectors. They also cited uncertainty over investment and earnings prospects in the AI semiconductor industry, along with risk-averse sentiment caused by rising international oil prices.

What factors are driving the recent correction in global and Korean stock markets?

The correction has occurred amid expectations of rising global interest rates, uncertainty about AI semiconductor investment and earnings prospects, and increased risk aversion linked to higher international oil prices. Renewed concerns over excessive AI spending also weighed on the Korean market.

What measures will the Korean government take to stabilize the stock market?

The government and financial authorities will maintain a high level of vigilance, strengthen joint real-time monitoring and respond strictly to market disruptions and unfair practices. The decision followed a review meeting involving the finance ministry, Bank of Korea, FSC and FSS.

Gov't vows stern action against unfair practices amid heightened stock market volatility

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Summary

The Korean government pledged strict action against unfair practices in the capital market in Seoul on Friday amid recent stock market volatility. Officials from four financial authorities attributed the correction in domestic and global markets to expectations of higher global interest rates, uncertainty over AI semiconductor investment and earnings, and rising oil prices. They said Korea’s economic and market fundamentals remain solid and agreed to strengthen real-time monitoring. The KOSPI fell 7.57 percent Thursday to 5,554.22, its sixth-month low, marking a seventh consecutive decline.

Key Facts

Officials from the Ministry of Finance and Economy, the Bank of Korea, the Financial Services Commission and the Financial Supervisory Service attended the market review meeting.
Officials projected Korean economic growth in the 3 percent range this year and cited a substantial current account surplus and positive corporate earnings outlooks.
The officials said Korea’s stock market has been more volatile than other markets partly because of its heavy weighting in AI-related sectors.
The government and relevant agencies agreed to maintain heightened vigilance, enhance joint real-time monitoring and respond strictly to market disruptions.

By Yonhap

Published Oct 16, 2026 10:47 am KST

An official works at Hana Bank's dealing room in Seoul, Thursday. Korea Times photo by Shim Hyun-chul

The Korean government on Friday pledged to take strict action against unfair practices in the capital market amid recent stock market volatility.

Officials from the Ministry of Finance and Economy, the Bank of Korea, the Financial Services Commission and the Financial Supervisory Service reviewed recent trends in domestic and global financial markets and discussed possible responses at a market review meeting in Seoul, according to the finance ministry.

They assessed that domestic and global stock markets are undergoing a correction phase amid expectations of rising global interest rates, uncertainty over investment and earnings prospects in the artificial intelligence (AI) semiconductor sector, and risk-averse sentiment stemming from rising international oil prices.

The Korean stock market has exhibited relatively higher volatility than other markets, partly due to its heavy weighting in AI-related sectors, they added.

The officials said the fundamentals of the Korean economy and stock market remain solid, with growth projected to reach the 3 percent range this year, a substantial current account surplus and positive corporate earnings outlooks.

The government and relevant agencies decided to maintain a high level of vigilance, strengthen real-time joint monitoring and respond strictly to any market disruptions, according to the finance ministry.

The Korea Composite Stock Price Index fell for a seventh consecutive session Thursday, plunging 7.57 percent to a six-month low of 5,554.22 amid renewed concerns over excessive AI spending.

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