South Korea market volatility nears record high after $13 billion foreign investor selloff
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Foreign investors dumped $13.2 billion of South Korean equities last week, sparking a near‑record surge in market volatility.
- Kospi fell as much as 4 % in early trade, extending Friday’s 6 % tumble.
- Kospi Volatility Index rose 2.56 % on Monday, a move Goldman Sachs said erased weekly gains amid the Trump‑Xi Summit and strong foreign outflows.
- South Korea’s exchange halted program trading for five minutes after Kospi 200 futures plunged 5 %, triggering a “sidecar” volatility curb.
- Citigroup cut exposure to half its bullish Korea position, citing the market as “much more overbought” than the U.S. and warning of retail “exuberance”, while expecting MSCI’s rebalance to boost inflows.
Why it matters: Foreign investors' sell‑off hurts South Korean issuers and boosts retail traders' leverage, while Citigroup reduces exposure and the exchange's halt curbs volatility, setting the stage for MSCI‑driven inflows.
