South Korean government vows tough crackdown on market abuse amid volatile AI-driven stocks

A high-level market review in Seoul brought together the Ministry of Finance and Economy, the Bank of Korea, the Financial Services Commission and the Financial Supervisory Service to assess recent swings in domestic and global equity markets. Participants noted that both Korean and overseas markets are in a correction phase, driven by expectations of higher global interest rates, doubts over earnings in the AI semiconductor sector and risk-averse sentiment from rising oil prices.

Because the Korean market is heavily weighted toward AI-related stocks, its volatility has outpaced many peers. Despite the turbulence, officials affirmed that the economy’s fundamentals remain solid, with growth projected in the 3 percent range, a sizable current-account surplus and positive corporate earnings outlooks. They committed to heightened vigilance, real-time joint monitoring and swift enforcement against any market manipulation. The Korea Composite Stock Price Index dropped for a seventh straight session, sinking 7.57 percent to a six-month low of 5,554.22 as worries over AI spending intensified.