South Korea's KOSPI index fell by 3% to 2,694.30 points. Semiconductor stocks led the decline, with SK Hynix and Korea's Samsung Electronics both falling more than 8%, while Hyundai Motors and Kia Motors both fell more than 4%. Overnight, the three major U.S. indexes fell sharply, with the Nasdaq down 2.3% and the Dow down 1.21%.
South Korea's consumer prices (CPI) in July rose more than expected, temporarily halting the cooling trend of inflation, which will further support decision-makers' cautious approach to a potential policy shift. The South Korean government reported on Friday that CPI rose 2.6% year-on-year in July, up from 2.4% in June and estimated at 2.5%. This is the first acceleration in CPI since February. The Bank of Korea is cautious about the prospect of policy easing and is waiting for further evidence of the expected cooling of inflation.