South Korea’s equity market, once the world’s top performer, has become a hunting ground for short sellers. Short positions in the Korean market have reached a three-year high, skewing risk to the upside. In July, the Korean benchmark index entered bear-market territory, with long positions liquidated and new shorts initiated. Citi analyst David Chew believes short positioning has become so one-sided that any stabilization in AI sentiment could trigger a sharp rally driven by short covering.
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