South Korea's stock market has lost its top spot in global investors' tactical playbooks, with Citigroup downgrading the country to a neutral stance after keeping it overweight for the past year, citing heightened volatility in AI-linked chip stocks, according to Reuters.
The move comes after a sharp swing in sentiment toward semiconductor stocks, which had powered South Korea's benchmark KOSPI index to become one of the world's best-performing equity markets this year. However, recent weeks have seen heavy volatility driven by retail enthusiasm for leveraged single-stock exchange-traded funds (ETFs) and growing concerns over stretched valuations, Reuters reported.
