Volatility in South Korea’s stock market picked up sharply in October, according to data from the Korea Exchange. The market’s Volatility Interruption, or VI, mechanism was triggered 6,646 times during the month, about 1.8 times the average level seen in August and September. From January through October, cumulative VI activations reached 53,372, already above the previous full-year record of 35,523 set in 2020.
Broader volatility gauges also moved higher. The KOSPI’s average daily volatility rose to 3.58% last month from 2.07% in September. As of 10:40 a.m. on Nov. 4, the KOSPI 200 Volatility Index, or VKOSPI, often described as South Korea’s version of a fear index, stood at 55.68 after rising for four straight trading sessions. The index had climbed above 80 in late July, then fell back into the 30s early last month before moving above 50 again as concerns over AI profitability resurfaced.
Sangsangin Securities researcher Kang Hye-seong said the recent rise in volatility came as global semiconductor stocks fell sharply during the third-quarter earnings season. He added that investor sentiment may remain weak until the profit models of leading AI companies become clearer and the revenue and cash flow of hyperscalers are confirmed.
Volatility in South Korea’s stock market intensified in October, with the Korea Exchange reporting 6,646 triggers of the market’s Volatility Interruption, or VI, mechanism during the month. That was about 1.8 times the average level recorded in August and September.
From the start of the year through October, cumulative VI activations reached 53,372, surpassing the previous full-year record of 35,523 set in 2020.
KOSPI and VKOSPI both moved higher
The KOSPI’s average daily volatility rose to 3.58% last month, up from 2.07% in September.
As of 10:40 a.m. on Nov. 4, the KOSPI 200 Volatility Index, or VKOSPI, often referred to as South Korea’s version of a fear index, stood at 55.68 and had risen for four consecutive trading sessions.
The index climbed above 80 in late July this year, then fell back into the 30s early last month. It has recently moved above 50 again as concerns over AI profitability resurfaced last month.
Researcher links the move to semiconductor weakness
Sangsangin Securities researcher Kang Hye-seong said, 「During the process of digesting the third-quarter earnings season, global semiconductor stocks fell sharply, which also pushed up volatility in the Korean stock market.」
He added that investor sentiment may not fully improve until the profit models of leading AI companies become clearer and the revenue and cash flow of hyperscalers are confirmed.
The report was cited from Yonhap News Agency.
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