Citigroup has downgraded South Korea to neutral after a year-long overweight stance, citing heightened volatility in AI-linked chip stocks and stretched valuations. While remaining positive on the long-term AI theme, the brokerage retained an overweight rating on Taiwan and upgraded China, signalling a shift in emerging market positioning.

The sharp swings have unsettled investors and regulators alike, with market movements increasingly driven by leveraged investment products rather than corporate fundamentals. The…

“We are all Korean investors now,” said Hani Redha, a London-based portfolio manager at PineBridge Investments.

South Korea's KOSPI plummets nearly 5% amid AI-driven selloff, raising investor concerns and triggering trading curbs.