Is Korean stock market turning into open casino? How retail leverage is fueling wild swings

South Korea's Kospi index fell more than 4% on Monday, extending its decline over 30% from the June peak of 9,386 into bear market territory, driven by a crash in AI-linked chipmakers SK Hynix and Samsung Electronics, which together make up just over half the benchmark. The selloff was amplified by speculative retail inflows into single-stock leveraged ETFs introduced in May, prompting authorities to ban new listings of such products and Citigroup to downgrade South Korean equities to neutral from overweight. Korean President Lee Jae Myung acknowledged the market's instability while Citi remained structurally positive on the long-term AI investment theme, upgrading China to overweight and maintaining its overweight on Taiwan.