Finance, in brief

South Korea's main share index, the Kospi, fell as much as 8.8% early on Friday. [1]

That set off a circuit breaker, which stopped trading for 20 minutes. [2] The rule exists to curb panic selling. [3]

The fall took the Kospi below 5,000 for the first time in nine months. [4] It was at 4,923.47 during that fall. [4]

The falls later eased as buyers stepped in. [5] At 4:17pm in Sydney the Kospi was down 5.2%. [6]

These Seoul figures are readings from during Friday's trading, because no source we hold gives its close. [6]

People saving for retirement through shares feel this too. [12] US President Donald Trump himself pointed to losses in Americans' 401(k) retirement accounts. [12]

South Korea's finance ministry said on Friday it would watch markets closely and act to stop excess swings. [1]

Funds crowded into AI shares with borrowed money can be forced to sell together. [13] Financial economists call selling from need, at whatever price, a fire sale. [13]

Timothy Moe of Goldman Sachs said unwinding and stop-loss selling made Asia's fall worse. [10] A stop-loss is an order to sell once a price hits a set level. [10]

When a fire alarm rings, everyone heads for one door, and the crush makes leaving slower.

Trump blamed Democrats for the fall. [12] But investors were already questioning the scale of AI spending before the vote. [14]

The next test is the US jobs report, due at 8:30am New York time on Friday. [15]

Investors are selling AI chip shares fast, in New York on Thursday and in Seoul, Tokyo and Taipei on Friday. [18] [2]

Where Seoul, Taipei and Hong Kong end Friday.

The Seoul, Taipei and Hong Kong figures here are readings during trading, and the falls were easing when our sources were written. [5] [6] None of them gave a close.

Whether data-centre building really slows.

Hinojosa has pledged a pause in Texas, but its Senate stays Republican, and CBA, an Australian bank, doubts it halts the wider build. [6]

Funds that use borrowed money were expected to sell about $47 billion of shares into Thursday's close. [18]

Nomura, a Japanese bank, made that estimate during the day. [18] It would be the second-largest amount in its data, going back to July 2006. [18]

These funds are called leveraged exchange-traded funds, and they trade on a stock market like a share. [18] Most of the expected selling came from tech and AI funds. [18]

Some other rule-based funds also react when markets swing harder. [18] Analysts said some investors sold first, to get ahead of that coming selling. [18]

This selling can make a market's move bigger, Reuters reports. [18] So owners of tech funds could see a larger fall than the news alone would bring. [18]

Fund managers call this rebalancing: resetting holdings to keep a fixed bet. [18] Funds promising 3 times a day's move, such as TQQQ, are of this kind. [28]

After a big fall these funds hold too many shares for the bet they promised. [18] So they sell, which can add to the fall. [18]

If you promise to keep half your pocket money in sweets, losing cash means swapping some sweets back.

The $47 billion was a forecast made during the day, and no final count is in our sources. [18]

Why an investor who borrowed has to sell when prices fall

An investor borrows money to buy more shares than their own money could buy

The lender sets a floor, called margin: the investor's own money must stay above a set share of the total

Prices fall, and the loss comes out of the investor's own money first, because the loan stays the same

Below the floor, the lender makes a margin call: put in more cash, or sell

That selling pushes prices lower, which can put the next borrower below their floor

Economists call sales made from need, at whatever price, a fire sale

An investor who borrowed does not get to choose when to sell, because the price makes that choice.

These numbers are made up. A fund buys $100 of shares with $25 of its own and $75 borrowed. A 20% fall leaves $80 of shares, $75 still owed and $5 of its own.

Bloomberg says margin calls have tested borrowed AI bets like VARA's this year, though VARA says it has kept more margin than it needed.

Ten giant funds hold $2.2 trillion on $360 billion of investors' money, so a fall in shares takes a large bite out of that smaller slice.

These funds are not called by a lender, but the step is close: a fall leaves too many shares for the bet they promised, so a rule makes them sell.

No source has counted how much of this week's selling came from margin calls, and many sellers simply changed their minds about AI.

The lender is protecting its loan and the fund is protecting what is left, and each move makes sense from where they sit.

Walleye Capital, a $17 billion hedge fund, told investors on Thursday it will shrink its in-house stock-picking unit. [13]

A hedge fund is a private investment fund, often using borrowed money. [29] Walleye will part with the unit's leaders and much of its teams. [13]

It lost 5.9% in October, its worst month since March 2020. [13]

VARA, another hedge fund betting heavily on AI, fell 33% in October, after 44% in July. [19] One class of its shares was still up 13% for the year. [19]

Goldman Sachs figures show hedge funds sold about $20 billion of tech shares in the two weeks before 26 October. [29]

Morgan Stanley's data show stock-picking funds cutting positions at their fastest since it began counting in 2016. [14]

When these funds sell at once, the selling pressure grows, one fund manager says. [30] So the shares they all own fall further for everyone else. [13]

Finance calls borrowing to bet bigger leverage. [29] Ten giant hedge funds hold $2.2 trillion of assets on $360 billion of their investors' money. [29]

So a fall in shares takes a big bite out of investors' money, because the loans stay the same. [29] A reversal can then force funds to sell. [13]

Buy a bike mostly with a loan, and if its price drops your own share goes first.

"This is a proactive decision," wrote Walleye's boss, Will England. [13] He said the unit had been its weakest strategy since 2023. [13]

Bloomberg says margin calls have tested borrowed AI bets like VARA's this year, though VARA says it has kept more margin than it needed.

The firm is moving money away from its in-house teams, so many lose their jobs. [13]

Small US investors sold a net $338 million of single shares on Thursday, Vanda Research reported. [28]

Vanda tracks what small investors buy and sell. [28] It was the group's largest one-day selling since March 2020. [28]

These investors usually buy when prices drop, and traders call that buying the dip. [28] That buying has largely gone from single shares, Vanda said. [18]

What buying was left went into funds that deliver 3 times a day's move, such as TQQQ. [28]

A market falls harder when the usual buyers step away. [28] Vanda called it a rare buyers' strike colliding with forced selling. [28]

Market economists call the supply of ready buyers liquidity. [30] With few buyers, a seller has to accept a much lower price. [30]

One fund manager said big funds had stopped their small buys while smaller funds sold everything. [30] So sellers met fewer buyers on Thursday. [30]

At a yard sale with one customer left, the seller has to drop the price to clear the table.

The $338 million was counted with an hour left, so it is not a final figure. [28]

How much of the fall was forced.

Vanda and a fund manager describe forced selling, and Bloomberg reports margin calls this year, but no source counts them for this week. [28] [30] [19] No readable source gives South Korea's borrowing figures either.

The VIX, Wall Street's fear gauge, rose 11.57 points to close at 28.18 on Thursday. [30] It was its highest since March. [30]

The VIX is built from what traders pay for insurance against a fall in US shares. [18]

That insurance, called a put option, cost about 2 times what is normal on Thursday. [18] Mercury Alerts, which tracks options, gave that figure. [18]

On Wednesday few wanted that protection. [18] On Thursday nearly 800,000 bets on a higher VIX had traded by midday. [31]

Some funds sell by rule when swings grow, Reuters reports, and that can add to a fall. [18] So a jump in this gauge can reach people who own those funds. [18]

Traders call what this insurance price implies volatility: the size of swing buyers fear. [30] A rule of thumb turns the VIX into a daily move. [31]

Traders treat a VIX of 16 as a move of about 1% a day. [31] So 28.18 means they fear swings well above that. [31]

Insurance for a house costs more once storms are on the forecast.

"The tape looks like a liquidation," one market watcher told CNBC, citing what he had heard about a hedge fund. [31] That is talk, not a record. [31]

Brent oil rose 1.67% to $99.90 a barrel on Friday. [20] Brent is the price most of the world's oil is sold at. [20]

US oil, called West Texas Intermediate, rose 1.43% to $91.69. [20]

Iran said three more tankers were damaged in the Strait of Hormuz on Thursday. [32] The strait is the narrow sea route out of the Gulf. [32]

UK officials counted 35 ships hit in October, the most of any month of the war. [32] At least 5 more have reported incidents since Sunday. [32]

A senior Iranian official told Reuters that Iran has sent the US a nuclear proposal through Qatar. [33] Iran wants its "seven demands" met first. [33]

The war has raised energy costs worldwide, CNBC says, and that feeds worry about inflation and the cost of living. [33]

Oil traders call this a risk premium: extra paid for the chance of losing supply. [33] Friday's rise came as traders weighed the risk of more fighting. [20]

Bob McNally of Rapidan Energy puts the chance of fighting resuming at 80%. [33] He expects both main oil prices to go above $100. [33]

Before a holiday strike, people buy train tickets early, just in case.

McNally's 80% is his own judgement. [33] Julius Baer, a Swiss bank, reads the same days as more room for talks. [33]

Whether US strikes on Iran resume.

Rapidan puts it at 80% and Julius Baer sees more room for talks. [33] An Iranian official declined to give details of Iran's proposal. [33]

The rate on the US government's ten-year loans fell to 4.83% on Thursday. [6] It was the lowest since early September. [25]

Early on Thursday, New York time, it had been 4.865%. [34] The rate began falling after the US stock market opened and shares slid. [25]

Traders also trimmed their bets on US rate rises. [25] They still nearly fully expected a quarter-point rise on 9 December, Bloomberg reported. [25]

Lower rates can give expensive growth shares some breathing room, Business Insider says. [35] Rates had been pushed up this year by surging oil, CNBC says. [34]

Bond traders call this a flight to safety. [25] Investors leaving shares bought government bonds, which pay a fixed sum. [25]

A bond's rate and its price move in opposite ways. [34] When buyers pay more for the same payments, the return on what they paid shrinks. [34]

Pay more for the same lemonade stand, and its same daily takings are a smaller return on your money.

Bloomberg gives two reasons: a hunt for safety, and fear of a slower US economy. [25] Its report does not split them. [25]

Buyers leaving shares bid up the price of the bonds these owners already hold. [25] [34]

Thomas Barkin, head of the US central bank's Richmond branch, said on Thursday he expects more rate rises. [23]

Beth Hammack, head of its Cleveland branch, also spoke in support of higher rates. [25] She had voted last month to raise them. [25]

The US central bank last month kept its main rate between 3.75% and 4%. [23] Barkin does not vote until 2027. [23]

Barkin said unemployment is near record lows and inflation is too high. [23] He said AI is pushing prices up. [23]

One CNBC reading put a rise on 9 December at about 70%. [8] Reuters reported 80% on Thursday. [36]

Central bankers call moving in small steps gradualism. [23] Barkin said it makes sense when the world is uncertain and new facts are coming. [23]

Barkin expects new facts between meetings, so a small rise leaves room to adjust the next step. [23]

You walk slowly across a dark room, because each step tells you what is ahead.

When the US central bank next raises its rate.

CNBC's measure showed about 70% for 9 December, Reuters 80%, and Reuters also reported traders pushing the next rise to March. [8] [36] [29]

The US publishes its October jobs report on Friday at 8:30am New York time. [15]

Economists polled by Dow Jones expect 59,000 new jobs, up from 29,000 in September. [15] Business Insider cites about 65,000. [35]

They expect unemployment to hold at 4.2%. [15]

From January 2025 through September 2026, job growth averaged only 35,000 a month. [15] Seven of those months saw jobs lost. [15]

A strong report would give the US central bank more room to raise rates. [11] A very weak one would add to fears of a slowdown. [35]

Labour economists call the jobs needed to keep unemployment steady the breakeven. [15] It falls when fewer new workers arrive. [15]

The US has an ageing workforce, low birth rates and less immigration, one economist told CNBC. [15] So 59,000 new jobs can still leave unemployment flat. [15]

A school with fewer new pupils needs fewer new desks to keep every child seated.

Japan's yen rose as much as 0.6% against the dollar on Thursday, to 157.54. [26]

It did better than all other major currencies that day. [26] A wide measure of the dollar edged up just 0.1%. [26]

CIBC, a Canadian bank, expects the yen to reach 148 by the end of 2027. [26] That is its own forecast. [26]

Toyota, Japan's big carmaker, says a weak yen helped lift its profit. [37] A rising yen would work the other way for firms selling abroad. [37]

Currency traders call the yen a safe haven: money goes there when shares fall. [26] Nomura calls it the best currency bet while shares and rates both fall. [26]

Nomura says Japanese money managers may also bring money home as the Bank of Japan raises rates. [26]

When it starts raining, the whole street heads for the same bus shelter.

One fund manager says cracks in AI can hurt the dollar, because US strength is so tied to it. [26] The dollar measure still edged up that day. [26]

Foreign funds bought about $1.6 billion of Indian shares on Thursday. [27] It was their biggest single-day buy in nearly six years. [27]

Before that they had sold more than $31 billion of Indian shares this year, up to October. [9] In the past 4 days they have bought over $2.3 billion. [9]

India's main indexes rose for a sixth day on Thursday. [27] The Sensex closed up 2.6% and the Nifty 50 up 2.4%. [4]

Indian firms are less tied to AI hardware, and more to banks, shopping and energy. [9] Cheaper oil helped too. [27]

Profits at India's listed firms are growing more than 20%, JPMorgan data show. [9] So buyers have a reason beyond leaving AI, and Indian shareholders gain from the new money. [9]

Fund managers say a fund is underweight when it holds less of a country than its benchmark list. [9] JPMorgan says undoing that could bring in $115 billion. [9]

Foreign funds cut India for almost two years over high prices and weak profits. [9] Moving back to an average holding would mean buying more. [9]

If your team has too few goalkeepers on its list, it must sign one, whatever the price.

Bernstein, a research firm, disagrees that India is a shelter from AI. [9] It says Indian shares remain expensive at 18.6 times next year's expected profit. [9]

Money leaving AI shares needs somewhere to go, and foreign funds are bringing some to India's market. [27]

Russian President Vladimir Putin signed a decree on Thursday putting four Japan Tobacco units under Russian management. [7]

Japan Tobacco is Japan's big tobacco company. [7] The units make cigarettes in Russia and now answer to a Russian firm, Industrial Assets. [7]

At 11:30am in Tokyo on Friday, buy and sell offers stood at ¥6,269, 19.3% below Thursday's record close. [7]

Russia brings Japan Tobacco about 10% of its sales and 25% of its operating profit. [7]

The decree gave no reason. [7] Relations have worsened since Japan's sanctions over Russia's invasion of Ukraine. [7]

Coca-Cola HBC, which bottles Coca-Cola, said on Thursday it had no notice of any change in Russia. [38] A Russian paper had reported a request to take over assets. [38]

Lawyers call a state taking a foreign firm's business expropriation. [7] Here the decree moves the management, and does not automatically move legal ownership. [7]

Without control, Japan Tobacco cannot count on those plants' profit, which makes it a big risk. [7] So buyers offered far less before any ownership change. [7]

Someone changes the locks on your shed: the bike inside is still yours, but you cannot ride it.

A big slice of the firm's profit now sits in plants it does not control. [7]

What Japan Tobacco finally loses.

The decree gave no reason and does not automatically transfer ownership, and the firm says it is still assessing the effect. [7]

Wendy's, the US burger chain, rejected a $1.4 billion offer to buy it from Nelson Peltz's Trian on Thursday. [39]

Trian, an investment firm, and its partners offered $7.35 a share in cash on 28 October. [40] It is already one of Wendy's biggest owners, with 16.3%. [39]

A board committee said the bid "substantially undervalues" Wendy's. [39] Sales at existing restaurants fell for a seventh straight quarter. [40]