Domestic Indices Slide Amid Hawkish Fed Signals
Major Korean stock indices declined sharply on Friday, bucking a US market rally fueled by consumer price data. KOSPI 200 futures fell 0.33%, the KOSPI index dropped 0.28%, and Kosdaq tumbled 1.77%. The downturn accelerated after the release of Federal Reserve meeting minutes, which highlighted persistent inflationary pressures and a cautious stance on rate cuts.
Foreign Selling Pressures Weigh on Market
Foreign investors ramped up net selling, reaching monthly highs in short positions across KOSPI and Kosdaq. This activity overshadowed support from key sectors, including those emphasizing shareholder returns. Despite the pullback, select stocks provided a floor: Samsung Electronics gained momentum from its world’s first HBM4 production rollout, while SK Telecom rose on highlighted value from its Anthropic stake. The KOSPI index held above the 5,500 level amid these offsets.
US CPI Beats Expectations, But Hawkishness Dominates
US consumer prices rose less than anticipated, with core CPI undershooting forecasts. Headline CPI also came in softer. However, the Fed’s summary reinforced risk-off sentiment, triggering a broad reversal. US indices closed higher earlier: S&P 500 up 0.58%, Nasdaq advancing 0.78%, and Dow gaining 0.26%.
Key US Movers and Individual Stock Action
Overnight US trading saw sharp declines in Nvidia and Meta shares, dragging major chipmakers lower. Yesterday’s inventory data showed a month-over-month drop of 1.4% versus expectations of 2.0%, while industrial production expanded 0.7% against a 0.4% forecast. These beats initially lifted individual stocks, but post-FOMC digestion led to partial retracements, with S&P 500 pulling back from 6,900.
Market Sentiment and Volatility Signals
Over the past 100 trading days, the rebound has felt uneven, with S&P 500 fluctuations barely registering in average daily moves. Options trading fully reflects shifting directions, underscoring economic fragility. The VIX index nears the 20-point threshold, while its volatility measure VVIX climbs further, signaling heightened trader anxiety.
Sector Highlights: Energy Calls Gain Traction
In energy, call option buying accelerates as put supply eases amid potential call-buying momentum from put operations. Current option bosses anticipate volatility spikes following Nvidia’s real-time data release next week.
Outlook: Rebound Uncertainty Persists
Semiconductor-heavy indices face ongoing pressure from US-Iran tensions and geopolitical risks. Gold prices hold firm amid safe-haven flows, while broader energy dynamics add to directional swings. Traders eye upcoming Nvidia metrics for clues on AI-driven momentum.
