Global Market: Citi downgrades South Korea to neutral as AI chip volatility mounts

Citi downgraded South Korean equities to neutral amid rising volatility in AI-related semiconductor stocks, while retaining an overweight on Taiwan and upgrading China to overweight in its emerging markets allocation. Yardeni Research separately downgraded emerging markets to market-weight, citing rising oil prices, a stronger US dollar and signs of AI-driven fatigue. South Korean equities have fallen about 23% in July even as they remain up around 55% year-to-date, while Taiwan's market is down around 8% for the month but still up approximately 47% in 2026.