South Korea’s Stock Rally Hit a Speed Bump — Goldman Sachs Says Buy the Dip

TLDR

• Japan and South Korea tech stocks fell Monday as investors took profits on semiconductor shares after last week’s rally
• South Korea’s KOSPI dropped 0.5%, with SK Hynix down over 4% and Samsung Electronics slipping
• SK Hynix is preparing to list $29 billion in American depositary receipts on the Nasdaq
• Goldman Sachs maintains a bullish outlook on South Korea, forecasting 20%+ upside for the KOSPI in 12 months
• Lower oil prices and easing geopolitical tensions supported gains in Hong Kong, Indonesia, and India

Asia’s tech-heavy stock markets pulled back on Monday as investors took profits on semiconductor shares after a sharp rebound last week. The selloff was most visible in South Korea and Japan, two markets with heavy exposure to the chip sector.

South Korea’s KOSPI closed down 0.5%, reversing an earlier gain. Japan’s Nikkei 225 also edged lower. Mainland China’s CSI 300 fell 0.6%, while Taiwan’s main index was little changed.

Chip Stocks Lead the Decline

SK Hynix fell more than 4% in Seoul, while Samsung Electronics slipped around 1.5%. Battery maker LG Energy Solution dropped nearly 4%. MediaTek slid 1.4% in Taipei.

Foreigners were net sellers of Korean shares worth 828.8 billion won on the day. The Korean won weakened 0.3% against the dollar.

The KOSPI has still risen around 86% so far this year, making South Korea Asia’s best-performing equity market in the first half of 2026. Most of those gains were driven by AI memory chip stocks.

One bright spot was Hon Hai Precision Industry, also known as Foxconn. The company rose 0.6% after reporting record revenue for June and the second quarter, driven by strong demand for AI servers. Taiwan Semiconductor Manufacturing also edged higher.

SK Hynix is preparing to list 17.79 million new shares through American depositary receipts on the Nasdaq, in a deal valued at around $29 billion. South Korean President Lee Jae Myung also called on officials to fast-track major chip and AI projects announced last week.

Bank of America said the recent pullback in AI stocks looks like a positioning reset, not a change in fundamentals. The bank said spending on AI infrastructure remains intact even as investors grow more selective.

Goldman Sachs Still Bullish on South Korea

Goldman Sachs said it still sees more than 20% upside for the KOSPI over the next 12 months, with a target of 12,000. The bank expects the rally to broaden beyond AI chip stocks into energy, materials, and industrials.

Goldman said foreign inflows are already rotating toward other AI-related sectors and industrials. It also noted that retail investors are not overexposed, and Korean households remain heavily weighted toward real estate and overseas equities rather than domestic stocks.

The bank forecasts earnings growth of 320% in 2026, followed by another 35% in 2027.

Broader Asia Mixed

Outside of chips, the picture was more positive. Hong Kong’s Hang Seng rose 0.9%. Indonesia gained 0.8% and India’s Nifty 50 added 0.7%.

Lower oil prices also helped sentiment. OPEC+ agreed to another production increase for August, keeping supply expectations high and easing inflation concerns.

Investors now look ahead to Fed meeting minutes due Wednesday, as well as inflation data from China, Taiwan, Thailand, and the Philippines. Taiwan’s June trade figures will be watched for signs that AI demand continues to support exports.

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