Korea's Net External Assets Hit 12-Year Low as KOSPI Soars - Seoul Economic Daily

• The United Arab Emirates has suspended all trade and financial dealings with Iran following reports of an Iranian missile attack targeting UAE ships. • This escalation occurs as U.S. President Donald Trump threatens an "economic campaign" against Iran to increase pressure on the regime.

• India's capital goods companies faced a challenging April-June quarter, experiencing significant pressure on both profit margins and overall earnings. • Renu Baid of IIFL Institutional Equities views this weakness as temporary, citing encouraging order books and a positive long-term outlook.

• South Korea's KOSPI index surged 5.89%, reversing previous losses and boosting investor confidence. • The rally was primarily driven by SK Hynix's announcement of a massive $28.69 billion share buyback plan.

• South Korea's Kospi index surged 6%, leading a broader rally across Asian markets following a positive trend in bonds. • Other key indices also rose, including the Hang Seng by 1.1%, the Nikkei 225 futures by 1%, and the Topix by 0.9%.

• Foreign Portfolio Investors (FPIs) significantly increased their investments in the Indian financial services and IT sectors during the first half of August. • Financial services saw the largest surge, attracting Rs 6,535 crore in inflows between August 1 and 15.

• Thailand’s SET Index closed at 1,609.99 points on August 20, 2026, marking a slight increase of 0.23 points (0.01%) with a total trading value of THB 82.36 billion. • The market experienced an early surge driven by positive overseas trends and investor reactions to declining bond yields following U.S. Treasury movements.

• The U.S. Treasury implemented a surprise bond buyback program aimed at limiting the rise of government bond yields. • Rising yields were driven by supply chain inflation, central bank interest rate hikes, and economic growth fueled by global AI infrastructure investments.

• Treasury official Bessent reaffirmed a plan to implement Treasury buybacks during the North American market session on August 20, 2026. • The initiative aims to signal to markets that current elevated long-term yields are not reflective of actual economic fundamentals.

• The Conference Board reports that the Six-Month Leading Economic Index has turned positive for the first time in four years, driven largely by business investments in artificial intelligence. • In contrast, Walmart reported its slowest sales growth in over six years on August 20, signaling potential financial strain on consumers despite Bank of America economists suggesting seasonal factors may be at play.

• Borrowing costs are rising across Europe as bond market yields increase, directly impacting mortgage offers in several of the region's largest economies. • Governments are facing a mounting financial burden to service their debts, with IMF data showing massive debt piles for France ($3.9tn), Italy ($3.5tn), Germany ($3.2tn), and Spain ($1.9tn) in 2025.

• US Treasury Secretary Bessent increased long-term Treasury buybacks in an off-cycle move, signaling to markets that a specific yield pain barrier exists. • Intra-EMU spreads rose throughout August, with Italy, Belgium, and France underperforming, suggesting ongoing market concerns regarding their public finance records.