During overnight trading on Friday, the iShares MSCI South Korea ETF (EWY) plummeted 5.18%, erasing gains from the previous session and highlighting continued volatility in Korean equity markets.
The sharp decline comes amid record institutional outflows from the fund. BlackRock's iShares MSCI South Korea ETF, the largest overseas fund tracking Korean equities, experienced $9.7 billion in net outflows last week—the largest single-week capital withdrawal in the product's history. Concurrently, short interest in EWY surged to 14.81%, reaching its highest level since February, reflecting growing bearish sentiment among traders.
Geopolitical tensions, particularly supply chain disruptions stemming from Middle East conflicts, have further eroded the safe-haven appeal that had previously attracted global capital to Korean markets, contributing to the selloff.
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