Asian markets opened on Monday: KOSPI triggers circuit breaker, Nikkei drops nearly 4%
KOSPI dipped 8% during the session triggering a circuit breaker, pausing for 20 minutes before narrowing to 4.4%. The Nikkei 225 saw a maximum drop of 3.89%, with SK Hynix shares falling 8%.
The reason isn’t complicated; the Middle East situation has driven up oil prices, and the Korean won has held above 1500 against the dollar for 13 consecutive days, accumulating input inflation pressures that were released today.
The circuit breaker is worth mentioning; the drop from 8% to 4.4% indicates that much of this is driven by algorithmic trading and panic rather than fundamentals. However, the need for a forced pause suggests that sentiment is ahead of pricing. In such cases, a rebound usually doesn’t happen immediately, and it’s more likely that we’ll need some time to digest.
Next, we’ll be watching two things: any signs of de-escalation in Middle East negotiations and whether oil prices can pull back. The 1500 level for the won has held for 13 days, and if it breaks, pressure will likely spread.
We also need to keep an eye on crypto; in extreme market conditions, correlations can suddenly spike, so don’t assume isolation.
DYOR, not investment advice
#KOSPI
KOSPI dipped 8% during the session triggering a circuit breaker, pausing for 20 minutes before narrowing to 4.4%. The Nikkei 225 saw a maximum drop of 3.89%, with SK Hynix shares falling 8%.
The reason isn’t complicated; the Middle East situation has driven up oil prices, and the Korean won has held above 1500 against the dollar for 13 consecutive days, accumulating input inflation pressures that were released today.
The circuit breaker is worth mentioning; the drop from 8% to 4.4% indicates that much of this is driven by algorithmic trading and panic rather than fundamentals. However, the need for a forced pause suggests that sentiment is ahead of pricing. In such cases, a rebound usually doesn’t happen immediately, and it’s more likely that we’ll need some time to digest.
Next, we’ll be watching two things: any signs of de-escalation in Middle East negotiations and whether oil prices can pull back. The 1500 level for the won has held for 13 days, and if it breaks, pressure will likely spread.
We also need to keep an eye on crypto; in extreme market conditions, correlations can suddenly spike, so don’t assume isolation.
DYOR, not investment advice
#KOSPI