A currency dealer walks in front of an electronic board displaying the Korea Composite Stock Price Index (KOSPI) and the Korea Securities Dealers Automated Quotations (KOSDAQ) at the dealing room of a bank in Seoul, South Korea, July 16, 2026. REUTERS
SEOUL, Aug 7 (Reuters) – South Korea’s stock market rout is unravelling a government-backed effort to lure retail ‘ant’ investors home, driving the biggest rush into the U.S. market in six months and reviving a long-standing risk to the won.
In July, as the benchmark KOSPI sagged to its largest monthly loss since the depths of the 2008 global financial crisis, retail buying of U.S. stocks hit $4.6 billion, according to Korea Securities Depository data.
That was well above the $2.7 billion monthly average in 2025, a year in which retail investment in U.S. equities more than tripled from the previous year.
Reuters calculations show those purchases surpassed buying of domestic shares for the first time since February, highlighting how quickly confidence in the local market has evaporated.
The reversal threatens to revive a years-old pattern in which retail investors funnel savings overseas, analysts say, acting as a drag on the South Korean currency and frustrating policymakers trying to deepen participation in the domestic market.
“Outflows slowed because the domestic market was strong, but they re-accelerated as the KOSPI collapsed, fanning investor views that the U.S. is the right decision after all,” said Kwon Ah-min, an FX analyst at NH Investment Securities in Seoul.
