TradingKey - On August 18, Japanese and South Korean stock markets closed lower across the board, with the Nikkei 225 Index (JPN225) closing down 2.54% at 67,460.73; South Korea's KOSPI Index closed down 1.55% at 6,869.80.

The South Korean market demonstrated a clear rally-and-retreat pattern, with the Korea Composite Stock Price Index (KOSPI) surging over 2% in early trading to reclaim the 7,100 mark before quickly reversing lower as selling pressure mounted.

Source: TradingView

South Korean semiconductor stocks showed divergent performance, with SK Hynix bucking the trend to rise 1.03%, closing at 1,662,000 won (about $1,177), while Samsung Electronics fell 2.19% to close at 268,500 won.

Japanese tech stocks registered steeper declines, with Kioxia tumbling 7.58% to close at 57,150 yen (about $358) and SoftBank Group dropping 0.95% to 5,830 yen. The previous rally driven by the AI and memory sectors experienced noticeable profit-taking today.

Despite heightened short-term volatility, institutions remain relatively optimistic about the mid-term outlook for South Korean equities. Morgan Stanley stated that as of mid-August, the KOSPI has completed a healthy recovery, with market upside momentum broadening beyond semiconductor stocks to wider sectors, while overall risk levels have also declined.

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