KOSPI Plunges 16.19% in October 2026: Causes and November Rebound Outlook

South Korea's stock market ended October 2026 with a steep decline. The KOSPI fell 16.19% over the month, marking the seventh-largest monthly decline on record.

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The KOSPI closed at 6,838.04 on September 30, then fell to 5,730.74 on October 30.

Even on October 30, the final day of the month, the index dropped 3.48% in a single day, significantly weakening investor sentiment.

There was also a sharp rebound during the month. The KOSPI rose 3.09% on October 27 and 6.63% on October 28, but fell again on the 29th and 30th. Even so, it gained 3.25% over the final week.

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Although the month saw a steep decline, the fact that a strong technical rebound also occurred over a short periodis a factor to watch when considering the market's direction in November.

Rather than attributing this decline solely to concerns about an economic recession, it can be seen as the result of combined doubts about AI investment profitability, foreign selling, and weakness in major semiconductor stocks.

As U.S. Big Tech companies poured substantial funds into AI data centers and semiconductors, questions grew about how quickly they could recoup their investment costs.

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Alphabet's deteriorating free cash flow and the burden of its large capital expenditures particularly heightened investor concerns.

This shift in investor sentiment also affected Samsung Electronics and SK Hynix. On October 30, the two stocks fell 3.02% and 7.08%, respectively.

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On the same day, foreign investors were net sellers of about 1 trillion 620 billion won on the KOSPI market.

With major semiconductor stocks, which have a large weighting in the index, weakening as foreign investors continued to sell, the KOSPI's decline can be understood to have deepened.

After the Korean market closed, U.S. stocks also fell further on October 30.

These figures reflect movements during regular U.S. trading on October 30, after the KOSPI closed at 3:30 p.m. Korea time.

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Therefore, it is difficult to view this decline in the U.S. market as the cause of the Korean market's fall on October 30. However, it could be an additional risk factor affecting the domestic market on November 2, the first trading day of November.

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What matters is not only whether the AI industry grows, but also whether it generates returns commensurate with investment.

Even if revenue from cloud and AI services increases, corporate free cash flow could worsen if spending on data center construction, GPU purchases, and electricity rises faster.

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Conversely, if AI service revenue and cash flow are both shown to be improving, concerns about memory demand for Samsung Electronics and SK Hynix could ease.

To gauge the KOSPI's direction in November, it is worth monitoring not only U.S. stocks but also exchange rates, interest rates, international oil prices, and foreign investor flows.

At the FOMC meeting held on October 27–28, the U.S. Federal Reserve kept its benchmark interest rate unchanged at 3.75–4.00% per year.

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If expectations of future rate cuts grow, valuation pressures on growth stocks could ease. On the other hand, if inflation or rising oil prices keep interest rate pressures elevated, a stock market rebound could be limited.

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A rise in the won–dollar exchange rate could increase foreign investors' concerns about exchange-rate losses. Conversely, a stable exchange rate and a return to net foreign buying could be positive signs of a market recovery.

The following factors can be monitored closely in November.

Above all, it is worth watching whether U.S. semiconductor stocks rebound while foreign buying recovers.

The KOSPI's November trajectory can be considered in terms of three broad conditional scenarios.

This table does not offer a definitive stock market forecast; it summarizes conditional trends that may vary depending on market factors.

Given that the KOSPI fell more than 16% over October, a short-term rebound is possible. However, the size of the decline alone does not prove that the trend has reversed.

Even if Samsung Electronics and SK Hynix maintain their earnings, their stock prices could undergo further corrections if concerns about a reduction in global AI investment intensify.

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On the other hand, if the semiconductor earnings outlook improves and foreign investor flows stabilize, a recovery could follow October's sharp decline.

In October 2026, the KOSPI fell 16.19% as concerns about AI investment profitability coincided with foreign selling.

However, it rose 3.25% in the final week, showing signs of a rebound despite the monthly decline.

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The key factor shaping the November market is whether expectations for AI industry growth translate into actual corporate earnings and cash flow.

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The stability of U.S. markets, earnings at Samsung Electronics and SK Hynix, foreign investor flows, and the direction of exchange rates and interest rates could also have an impact.

Rather than drawing conclusions from short-term spikes and drops alone, it is important to calmly assess corporate earnings and capital flows.

The November market faces both the possibility of a rebound and the risk of further correction. Rather than focusing on daily index movements, investors should check whether earnings and investor flows continue to support a rebound.

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