South Korea Drops on Tech Selling While Most World Funds Slip

Trading on Monday, October 12 belonged to South Korea, noticeably bigger than its usual day. Across the world, only 2 of the 8 tracked international markets rose on the day. The broad world fund closed -0.2%, moving closely in line with US portfolios where the S&P 500 fund closed -0.1%. At the top of the group, India +0.7% led the session, while South Korea -4.0% sat at the bottom. These numbers come from US-listed funds, so Japan is how Japan looked to a US investor at the New York close.

Elsewhere, gains were rare. The only other fund to finish higher was the United Kingdom +0.4%, while continental peers lagged as the Eurozone -0.4% fund closed lower and Germany 0.0% ended flat. In Asia, Japan -0.6% and China -0.8% both settled lower, leaving Emerging Markets -1.0% at a loss for the day.

The retreat in South Korea -4.0% followed a reopening after a holiday in Seoul, where selling tied to technology concerns spilled into local trading. South Korea's benchmark fell 3.65% during Asian trading hours as technology selling and elevated oil prices weighed on the market. Doubts also mounted around the durability of the semiconductor supercycle. Heavy institutional selling worsened the drop, with international funds selling a net 2.02 trillion won of local equities. Fading support from company share buybacks and caution ahead of upcoming inflation reports left the market vulnerable, which carried through to the US-listed fund by the New York close.

On the positive side, India +0.7% led all tracked international funds. In domestic Mumbai trading, equities opened higher on early relief from lower crude prices and central bank measures introduced to stabilize the rupee. While domestic indexes later gave up those morning gains as local investors weighed inflation risks and foreign capital outflows, our sources show no reported driver for why the US-listed fund held its advance to finish as the top performer.

On the economic calendar, scheduled releases for the session were led by India's monthly consumer price index report.