Declines in Europe and Wall Street futures

10:30

In line with the global trend, trade in Europe is also declining. The Paris Stock Exchange leads the declines (1.2%), Frankfurt and London decrease by about 0.5%.

08:00

Volatility in South Korea’s stock market soared this morning to levels close to an all-time high, after foreign investors last week “poured” local shares worth $13.2 billion – a move that caused sharp fluctuations in the Kospi index and led to the temporary activation of a trading suspension mechanism on the stock exchange.

The Kospi index fell by up to 4% during early trading before recovering and moving higher, following a 6% fall last Friday – a fall that Goldman Sachs described as “mimicking the weekly gains against the backdrop of the Trump-Xi summit and massive capital outflows from foreign investors out of the market.”

The Kospi Volatility Index (Korean VIX) jumped 2.56% this morning, approaching the highs recorded in early March.

Overseas investors pulled about $17 billion from emerging Asian markets (excluding China) last week, marking the second-largest weekly outflow in history, according to Goldman Sachs data. South Korea concentrated the bulk of sales with redemptions of $13.2 billion, followed by Taiwan with $2.5 billion.

The South Korean stock market briefly halted some computerized trading (trading software) on Monday, after sharp losses in stock index futures triggered the “Sidecar” mechanism – a protective mechanism designed to calm market volatility. The limit was put in place after Kospi 200 futures fell 5%, prompting a five-minute freeze on automated trading.

This surprising turnaround came after the Kospi crossed the 8,000-point mark for the first time last week, riding the waves of euphoria surrounding artificial intelligence (AI) stocks, chip makers and strong momentum from retail investors.

Following the events, strategists at Citigroup noted that the Korean market now appears to be “much more extreme overbought compared to the American market”, which prompted the bank to cut its exposure to the bullish long position on South Korea.

07:20

The trading week in Asia opened this morning (Monday) with falling rates, oil is rising and the trend on Wall Street is also expected to be red against the background of the fear of a return to war.

● The stocks that will fall in trading today, and is the chip sector on the way to a correction?

In a post published by President Trump on the “Truth Social” social network yesterday (Sunday), he wrote that “the clock is ticking” for Iran and warned that “there will be nothing left” if steps are not taken soon, while adding that “time is pressing!” (!TIME IS OF THE ESSENCE). He did not specify what steps he expects Iran to take or what the consequences will be as a result of this, but the fear is, as mentioned, of an American attack on Iran that will send energy prices into another upheaval.

As a result, oil prices rise by more than 1%. Brent oil futures (the international index) strengthened by 1.34% to the level of 110 dollars per barrel. WTI oil futures in the US rose 1.75% to $107 per barrel.

In Asia this morning (Monday) rates fell by 0.7% in Japan and by 2% in Korea.

Also in New York, rates are expected to drop by half a percent after the negative lock on Friday.

We will remind you that the stock market retreated last Friday from the highs it recorded the day before, when the S&P 500 index closed above 7,500 points for the first time and the Dow Jones regained the 50,000 points mark. Thus, at the end of the trading week, the Nasdaq fell by about 1.5%, the S&P 500 weakened by about 1.2% and the Dow Jones lost its value by about 1.1%.

The declines on Friday were led by the chip sector, which previously recorded an unprecedented rally. Nvidia which will publish its results this week lost about 4% on Friday.