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Record one-day drop in Korean equity markets follows months-long surge driven by levered bets
The collapse of Korea’s Kospi index, which fell more than 12% on Wednesday following a 7% drop the previous day, may have been exacerbated by selling pressure from leveraged exchange traded funds (ETFs).
Much of the sell-off can be explained by fundamentals. Korea’s heavy reliance on Middle East oil makes the country highly vulnerable to an effective closure of the Strait of Hormuz, the main
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