TradingKey - Safe-haven demand surges on U.S. election voting day; Japanese market closed; KOSPI plunges 3.59% at open, with Samsung Electronics and SK Hynix tumbling around 5%.
During Asian trading hours on November 3, Japanese stock markets were closed today for the "Culture Day" national holiday. Meanwhile, after experiencing an explosive V-shaped reversal yesterday where it rebounded strongly following a lower open, the South Korean stock market succumbed to a pronounced safe-haven sell-off at today's open, opening with a sharp downward gap.
The South Korea Composite Stock Price Index (KOSPI) opened significantly lower and continued to slide, dropping 3.59% to temporarily stand at 5,649.03 points. Samsung Electronics tumbled 4.8%, losing the 220,000 level again to temporarily trade at 218,000 Korean won; SK Hynix dropped 5.3%, breaching the key 1,400,000 level to temporarily trade at 1,394,000 Korean won.
KOSPI Index Chart, Source: TradingView
The main driver behind the drop in South Korean stocks at the open was the arrival of the official voting day for the U.S. midterm elections, as U.S. tech stocks continued to slide under pressure, with the Nasdaq falling over 1%, the Philly Semiconductor Index dropping over 3%, and Marvell (MRVL) plunging over 12%, Oracle (ORCL) falling over 8%, while mega-cap tech stocks such as Apple, Nvidia, and Microsoft all posted varying declines, dragging South Korean stocks down in tandem.
Today's decline represents classic safe-haven positioning ahead of the midterm election results. However, as the voting results roll in from later today through tomorrow, once political uncertainty dissipates, capital on the sidelines is expected to flow back into risk assets, driving a post-election relief rally.
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