Volatility

• Stock market volatility in South Korea is easing as leveraged trades unwind following the implementation of regulatory curbs. • Morgan Stanley estimates that the deleveraging process is now more than half complete, though volatility remains elevated. • Investors are currently balancing historically cheap valuations and a strong earnings outlook against the risk of further sharp price swings.

• Asia Pacific equity capital markets reached record activity levels last month, driven by massive share sales from companies linked to artificial intelligence. • This surge in capital raising occurred despite overall weakness and volatility across the region's broader stock markets. • The trend highlights the immense investor appetite for AI-related assets, which is currently offsetting general macroeconomic instability in the region.

• Chinese regulators have implemented new initiatives to curb quantitative trading to stabilize the domestic stock market. • These measures have successfully reduced market volatility but have simultaneously led to a significant decline in trading turnover. • The shift highlights a regulatory trade-off where the pursuit of stability is inadvertently sapping the liquidity and activity of equity markets.

• A report from PL Asset Management released on August 3 indicates that India's equity markets remain resilient despite global geopolitical volatility and commodity price swings. • The analysis highlights that low inflation, accommodative monetary policy, and strong government capital expenditure are creating a favorable investment climate. • This stability suggests that India's long-term structural growth story is intact, as much of the current global economic uncertainty has already been priced into the markets.

• Over 50% of South Korea's listed companies surpassed market expectations in their second-quarter earnings reports. • These strong financial results indicate that corporate fundamentals remain resilient despite significant volatility currently affecting the Kospi. • The trend is critical as it bolsters investor confidence in the underlying strength of the Korean economy amidst market instability.

• The 2024 U.S. presidential election has seen a significant shift in focus, moving from traditional policy debates to legal battles and courtroom proceedings. • Central to this volatility are complex judicial questions regarding presidential immunity, executive accountability, and the timing of criminal trials during an active campaign. • This trend of "lawfare" is testing the resilience of U.S. institutions by placing the judiciary at the center of the political narrative.

• The KOSPI closed at 6755.75 on the 27th, marking an increase of 65.13 points (0.97%) amid recent market volatility. • Investors are closely monitoring the U.S. Federal Open Market Committee (FOMC) and second-quarter earnings reports from tech giants including Microsoft, Meta, Amazon, and Apple. • The market is specifically focused on the second-half guidance of semiconductor firms like Samsung Electronics and SK Hynix, as well as investment plans from hyperscalers.