IC – Europe Fundamental Forecast | 20 July 2026 | IC Your Trading Edge

• The KOSPI index plunged 20% in July, driven by extreme market volatility and high-risk leveraged bets by South Korean retail investors. • Investors are utilizing massive amounts of borrowed cash, with margin loans totaling 34.37 trillion won ($23 billion) this week, following a June peak of 38.6 trillion won.

• Brent crude oil prices surged above $90 per barrel following escalating U.S.-Iran tensions and renewed shipping disruptions in the Strait of Hormuz. • The Canadian dollar remains firm following the Bank of Canada's decision to maintain its policy rate at 2.25% for the sixth consecutive meeting.

• On July 20, the KOSPI closed down 4% in the 6500 range, while the KOSDAQ plunged 5%, triggering sell-side sidecar measures on both markets. • Market sentiment in the semiconductor sector was severely weakened by Kioxia's U.S. patent lawsuit defeat, which resulted in compensation orders exceeding 300 billion won.

• The China Securities Regulatory Commission (CSRC) chairman has vowed to maintain a "stable market" following a rebound in A-shares driven by concerted buying. • This commitment follows a strategic meeting between the CSRC and investor representatives aimed at boosting confidence in the domestic stock market.

• Market weakness is currently impacting the Nasdaq and Asian technology sectors, placing leveraged retail and momentum strategies at high risk of liquidation. • Analysts identify memory stocks as the most vulnerable due to extreme gains, while quality AI infrastructure at reset multiples is viewed as a primary opportunity.

• South Korea's KOSPI index plummeted nearly 5% on Monday, sliding into a technical bear market. • The decline was driven by a sell-off in AI and semiconductor stocks, compounded by escalating tensions between the US and Iran that have impacted global oil prices.

• South Korea's stock market has shifted from a stable economic bellwether to a volatile hub of AI-driven speculation, impacting portfolios from Tokyo to New York. • Extreme instability is evident on the benchmark KOSPI, where more than half of all historical circuit breakers—triggered by an 8% drop within one minute—have occurred in the last six months.

• The S&P 500 rose during early trading on Monday, rebounding after experiencing its first losing week in the last three. • Market stability is being driven by a recovery in chip companies and other stocks that have benefited from the artificial intelligence boom.

• Yelp (YELP) and Opera Limited (OPRA) are diversifying into social media, connected TV, and search to drive revenue growth amid ongoing economic and regulatory pressures. • TE Connectivity (TEL) is set to report its Q3 fiscal 2026 earnings on July 22, with analysts forecasting a 17% year-over-year increase in adjusted EPS to $2.83.

• Indian markets are facing downward pressure as crude oil prices rise and geopolitical tensions in West Asia continue to influence investor sentiment. • Traders are closely monitoring whether the Nifty index can maintain its position above the critical 24,000 mark during Tuesday's session.

• JPMorgan Chase (JPM) stock is trading steadily following the report of strong revenue and net income for 2025. • The bank's stability is supported by a large market capitalization and robust performance across its corporate and investment banking segments.

• Indian stock markets closed lower due to negative sentiment driven by rising crude oil prices and escalating tensions between Iran and the US. • Market analysts are closely monitoring geopolitical risks, inflation data, and upcoming central bank actions to determine future trends.