South Korea’s KOSPI Slides Into Bear Market as Tech Shares and Global Risks Weigh

South Korea’s benchmark KOSPI index entered bear market territory on July 8 after dropping 20% from the record high it touched in June. The decline came as renewed geopolitical tensions in the Middle East pushed oil price higher and triggered a broad selloff in Asian equities, while concerns over the technology sector added to market pressure.

Asian Markets Retreat as Oil Price Climbs

During early trading on July 8, the KOSPI was down more than 5% at 7,248.78. The wider weakness followed an increase in crude oil price after the U.S. launched fresh airstrikes in Iran and withdrew a waiver that had allowed Iranian oil exports, according to Reuters. Brent crude price rose as much as 2.8% to trade above $76 a barrel, while the MSCI Asia Pacific Index declined nearly 1%.

U.S. equity futures also reflected cautious sentiment. S&P 500 futures edged 0.1% lower, while Nasdaq 100 futures were little changed during Asian trading hours.

Technology Stocks Remain Under Pressure

Technology shares remained under scrutiny after Reuters reported that Chinese artificial intelligence startup DeepSeek is developing its own semiconductor chip. The report raised questions about future demand for products supplied by established global chipmakers.

The pressure on semiconductor companies followed weaker investor sentiment after Samsung Electronics released its latest earnings. Although the company reported results that exceeded analysts' estimates, they did not meet elevated market expectations, leading to a sharp decline in its share price and weighing on other South Korean memory-chip manufacturers.

The weakness in Samsung share price contributed to the broader decline in the KOSPI and spilled over into global semiconductor stocks.

U.S. Chip Stocks Extend Losses

The cautious mood carried into U.S. markets. The Nasdaq 100 fell 1.8% in the previous session, while the S&P 500 closed 0.4% lower. Semiconductor sector companies including Micron Technology and Sandisk also declined as investors reassessed expectations surrounding companies linked to artificial intelligence-related spending, according to Reuters.

Michael Purves, Chief Executive Officer and Founder of Tallbacken Capital Advisors, told Reuters that the semiconductor sector had already recorded a strong rally, making investors more sensitive to any signs of slowing momentum. He added that while Samsung's results were solid, market enthusiasm had eased even though the longer-term outlook for chip stocks could remain intact.

The combination of rising oil price, geopolitical uncertainty and renewed pressure on technology shares weighed on investor confidence across regional markets, pushing South Korea's benchmark index into bear market territory after its recent record highs.