KOSPI Tumbles 3.6% as AI Selloff Deepens

RoboMacro ResearchAlso todaySee the Japan Macro Daily

KOSPI Tumbles 3.6% as AI Selloff Deepens

2.80 Inflation Rate

KOSPI5,648.79-3.59%

KOSDAQ704.39-4.08%

USD/KRW1,340.83-0.30%

Samsung212,000.00-3.42%

Market Snapshot

Asset	Level	Change
KOSPI	5,648.79	-3.59%
KOSDAQ	704.39	-4.08%
USD/KRW	1,340.83	-0.30%
Samsung	212,000.00	-3.42%
SK Hynix	1,339,000.00	-4.22%
Brent Crude	95.08	-8.22%
Gold	4,073.10	+3.37%
Bitcoin	80,222.83	+3.72%
Korea 3Y Govt Yield	3.74%	0 bp
Korea 10Y Govt Yield	4.00%	-3 bp

Prior Economic Events

Data	Prior	Cons	Actual
Inflation Rate Year-over-Year	2.90	2.90	2.80

Today's Economic Events

Data	Prior	Cons	Time
No events available

KOSPI plunged 3.59% to 5,648.79 and KOSDAQ fell 4.08% as a global AI-related selloff hammered semiconductor heavyweights Samsung (-3.42%) and SK Hynix (-4.22%).
October CPI eased to 2.80% y/y from 2.9%, but inflation remains above the BoK's 2% target, keeping the case for further tightening alive ahead of the November 26 MPC.
Korea 10Y yield eased 3 bp to 4.00% while the 3Y held at 3.74%, a modest safe-haven bid contrasting sharply with the equity rout; USD/KRW slipped 0.30% to 1,340.83.

Yesterday's Recap

South Korea's October inflation printed at 2.80% y/y, a touch below both the prior 2.9% and consensus of 2.9%, yet still comfortably above the Bank of Korea's 2% target. The modest cooling did little to alter the policy narrative, with WSJ and Bloomberg both framing the print as consistent with "above-target" inflation and a live case for additional hikes. Equities told a very different story: the KOSPI dropped 3.59% to 5,648.79 and the KOSDAQ shed 4.08% to 704.39, with Samsung falling 3.42% to 212,000 and SK Hynix down 4.22% to 1,339,000 as escalating AI concerns triggered a broad tech de-rating.

The won firmed modestly, with USD/KRW down 0.30% to 1,340.83, aided by expectations of dollar weakness following the Democrats' midterm sweep. Rates were mixed but orderly: the 10-year yield eased 3 bp to 4.00% while the 3-year held at 3.74%, a flattening bias consistent with growth concerns offsetting hawkish inflation optics. Household loans rebounded by 2.8 trillion won in October, underscoring that credit demand and household leverage remain key financial-stability watch items for the BoK.

The Day Ahead

The domestic calendar is empty for November 4, leaving Korean markets to trade on offshore cues and the prior session's momentum. With no scheduled data, focus shifts to the AI-driven global tech selloff and whether Samsung and SK Hynix can stabilize after Tuesday's sharp declines. Traders will also monitor USD/KRW for follow-through on the midterm-driven dollar narrative and watch for any BoK commentary on inflation persistence in services and durable goods.

Bond investors will eye whether the 10-year's 3 bp rally extends, with the 3Y–10Y spread at 26 bp offering limited room for further flattening. Attention increasingly pivots toward the November 26 MPC, the next scheduled policy event.

Other Economic Notes

The rebound in household loans by 2.8 trillion won in October signals that credit growth is re-accelerating even as the policy rate sits at 3.00%, complicating the BoK's financial-stability calculus. ↓ p.2

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Other Economic Notes (continued)

A "K-shaped" rift is widening, with the semiconductor boom distorting household finances and fiscal metrics while broader domestic demand lags. The FSC finalized a record 3.75 billion won fine on banks and brokers over Hong Kong ELS mis-selling, a reminder that retail exposure to structured products remains a supervisory priority. KakaoBank beat expectations with 141.7 billion won in Q3 net profit, highlighting resilient digital-bank earnings.

Corporate governance news also drew attention, with Hoban overtaking Cho Won-tae as Hanjin KAL's largest shareholder.

Global Macro News

A renewed global AI selloff is the dominant external shock, dragging Korean tech names and the KOSPI lower in sympathy with U.S. semiconductor weakness. Brent crude collapsed 8.22% to $95.08, a disinflationary impulse that could ease imported cost pressures for Korea's energy-intensive economy.

Gold surged 3.37% to $4,073.10 and Bitcoin rose 3.72% to $80,222.83, signaling risk aversion alongside speculative appetite. The Democrats' midterm sweep has reinforced expectations of a softer dollar, a tailwind for the won and Korean exporters. Global bond markets remain sensitive to growth fears, and Korea's 10-year easing 3 bp reflects that pull.

For an export-driven economy, weaker external demand and a firmer won present a mixed trade backdrop.

Continuation

BoK Watch

The Bank of Korea held its base rate at 3.00% at the October 22 decision, and the committee voted to hold without a disclosed split. October CPI at 2.80% remains above target, and the BoK has explicitly flagged that inflationary pressure persists in personal services and durable goods, suggesting the committee is not yet ready to declare victory. Market pricing and media commentary increasingly point to another hike, with Bloomberg noting the firm inflation print "bolsters the case for more hikes." Against this, the equity selloff and softening crude argue for patience, and the October household-loan rebound adds a financial-stability dimension that complicates easing.

The next MPC on November 26 is the key event; until then, guidance will hinge on whether services inflation proves sticky. For markets, a hawkish hold bias supports the front-end and the won, but the growth backdrop caps how far the 3-year can rise.

Korea Macro Daily(Beta Mode)