KOSPI opened 198 points lower after a Nasdaq decline of only 0.44%

Add the 198.16-point fall to the 6,186.08 open and the implied prior close is 6,384.24 ^[7]. Against that base, the 3.1% gap ^[1] is about seven times the Nasdaq Composite's 0.44% overnight loss ^[8][5].

That leaves three readings, and the two reports do not choose among them. Korean shares may simply move several times as far as the Nasdaq on a given night, in which case 3.1% is an ordinary response to a small signal. The open may overshoot and fill back toward 6,384.24 during the session. Or part of the price is not U.S. tech at all: Yonhap also cited major companies' earnings reports and U.S. inflation data ^[3] (it did not say which companies), and Seoul Economic Daily's item ^[2] stated only the level. Neither report included a close or a cause for the size of the drop.

In our view the 3.1% mostly prices events that have not happened yet, with the Nasdaq as the trigger. A 0.44% move cannot carry a 3.1% fall by itself, and the CPI report is due Wednesday, after Tuesday's open ^[6]. The counter-thesis is the first reading above: Korean shares routinely overreact to U.S. tech, and there is nothing further to explain.

We would be wrong if the index closes above roughly 6,320, within 1% of the implied prior close ^[9]; that would make the open a short-lived gap. We would also be wrong if the CPI report arrives and KOSPI barely moves, since that would mean the index is less exposed to the Fed's October path ^[6] than Yonhap's framing suggests.