Home / Business and Economy / Korean Stocks Tumble, Volatility Spikes to Record Highs
Korean Stocks Tumble, Volatility Spikes to Record Highs
3 Feb
Summary
- South Korean stock market experienced its sharpest fall since April.
- The Kospi 200 Volatility Index reached a record high against its US counterpart.
- Investor caution grew due to AI trade concerns and potential US policy shifts.
South Korea's stock market experienced a substantial downturn on Monday, marking its steepest decline since April. This volatility surge is particularly evident in the Kospi 200 Volatility Index (VKOSPI), which reached unprecedented levels compared to the US Cboe Volatility Index.
The recent pullback follows a formidable rally where the benchmark Kospi index more than doubled from a low last April. Investors, who had been hedging and positioning for further gains, are now expressing increased caution.
Growing concerns over the artificial intelligence trade, which previously boosted major companies like Samsung Electronics Co. and SK Hynix Inc., contributed to the selloff. Shares of these chip giants saw significant drops. Additionally, uncertainty surrounding potential changes in US Federal Reserve policy added to market jitters.
Market analysts suggest a cautious approach is warranted, advocating for confirmation of a market rebound before initiating new positions. Despite the pullback, some view it as a potential buy-the-dip opportunity, though the pronounced rise in VKOSPI reflects heightened market uncertainty.
