Kospi drops 20% in Q3, worst global performer despite AI rally

South Korea's Kospi index fell nearly 20% in Q3 2026, the worst performance among major global markets, after a July sell-off triggered by AI-related profit-taking and concerns over semiconductor valuations. Despite the sharp quarterly decline, the index remains up 60% year-to-date, reflecting the volatility of AI-driven market leadership. The drop signals potential contagion risk for tech-heavy Asian markets and raises questions about the sustainability of the AI rally.