Market Overview - Foreign investors have sold more than $7 billion in Korean shares over the last two trading sessions, leading to significant losses in the South Korean stock market [2] - The Kospi Composite index experienced a 7% correction, prompting market regulators to implement a short-term suspension of program trading due to triggered circuit breakers [3] Currency and Commodities - The Korean won depreciated by 1.34% against the U.S. dollar amid a risk-off sentiment towards emerging-market currencies, influenced by rising crude oil prices following U.S.-Israeli strikes on Iran [4] - South Korea, as one of the largest importers of crude oil, requires approximately 2.7 million barrels daily, with around 70% of its supplies sourced from the Middle East [4] Major Companies Impacted - Samsung Electronics and SK Hynix, the world's largest memory-chip manufacturers, saw their shares decline by 9.88% and 11.5%, respectively [5] - Despite these declines, the Korean market has shown healthy returns of 37% year-to-date in 2026 and 128% over the last 12 months, although recent trading activity indicated speculative behavior among retail traders [5] Investor Behavior - Data from the Korean exchange indicated that international investors began reducing their exposure, with a net outflow of 7 trillion won ($4.7 billion) on the last trading day of February, followed by another net selling of 5.4 trillion won [6] - The recent drop in the benchmark index marked the largest one-day decline since the volatility caused by the yen carry trade unwind in August 2024 [6] Sector Performance - Certain sectors, including shipping companies like Korea Line Corp. and STX Green Logis, defense stocks such as Hanwha Systems and Lig Nex1 Co, and energy companies like Daesung Energy, experienced upward movement amid the broader market decline [7]

Economic Overview - US headline inflation cooled to 2.4% in January, down from 2.7% in December and below the expected 2.5%, increasing expectations for a Federal Reserve rate cut by June [2][8] - Global trading remains thin due to US markets being closed for Presidents' Day and major Asian markets, including China and South Korea, closed for the Lunar New Year holidays [8] Technology Sector - The technology sector is facing significant challenges as fears of "AI cannibalization" lead to a rotation out of major tech stocks like Nvidia (NVDA) and Apple (AAPL), with software and services indices dropping 20% over the last month [3][8] - Nvidia and Apple both saw declines of more than 2.2% on Friday, contributing to a 0.2% drop in the Nasdaq Composite [3] Commodities Market - Gold prices are holding firm near record levels, trading at $5,030.30 per ounce, supported by falling Treasury yields and significant inflows into gold ETFs totaling $19 billion in January [4][8] - Precious metals are a focus for diversification, with gold testing the $5,140 resistance level after recovering from a brief "flash crash" [4] Corporate Activity - A developing situation in the logistics sector involves Aberdeen opposing a $9.25 billion takeover of InPost (INPST) by a FedEx-led consortium, labeling the bid as an "opportunistic attempt" [5] - Traders are anticipating a busy earnings week with reports expected from Walmart (WMT), Warner Bros. Discovery (WBD), and Palo Alto Networks (PANW) [5]