Foreign Selling and Record Korean Margin Debt Drove Asia's Chip Stock Plunge

Foreign investors sold Asian stocks at the fastest pace in at least 16 years through H1 2026, per Reuters. In South Korea, $25 billion in record margin debt amplified the Kospi's 8% July 2 plunge, forcing brokerages to liquidate positions and trigger 20-minute circuit breakers. Leverage turned a sentiment-driven selloff into a mechanical cascade.