Equities show the clearest recovery in risk appetite, but holdings remain below mean-reversion levels. Developed markets are rebounding faster than emerging markets.<\/p>\n
South Korea and Taiwan were heavily affected due to high exposure to the global AI theme and energy supply problems. Both were overheld before the conflict.<\/p>\n
South Korean equities fell almost 40 percentage points versus the rolling 12-month average from peak to trough. Only a small part of that decline has been recovered.<\/p>\n
Taiwan\u2019s fall was smaller, but the rebound has also been limited. A sustained holdings recovery in these two markets would indicate broader normalisation in global risk sentiment.<\/p>\n
Global demand remained robust, with only light outflows in Canada, Czechia, South Korea and the Philippines. Inflows were recorded in Australia, Norway, Sweden, Brazil, Mexico, Chile, Hungary, T\u00fcrkiye, China and Taiwan.<\/p>\n
In emerging markets, industrials, consumer staples, financials, IT and utilities saw strong inflows. iFlow Mood rose to 0.258, driven by faster equity demand, near mid-February 2026 highs.<\/p>\n
The current market shows a growing appetite for risk, especially in stocks, with sentiment indicators approaching the highs we saw in mid-February 2026. However, the recovery is not uniform, and overall positions have not returned to their long-term averages. This suggests that while the direction is positive, there is still room for markets to run.<\/p>\n
We believe the most important signal for a full-scale risk-on environment will come from South Korean and Taiwanese equities. Both markets were hit hard during the energy supply crisis in 2025 and have recovered only a fraction of their losses. For instance, the KOSPI, which fell nearly 40% from its peak, has only recently stabilized around the 2,850 level, with foreign inflows just starting to return in the last month.<\/p>\n
For traders, this points to positioning for a catch-up rally in these specific markets through derivatives. Buying call options or establishing bull call spreads on the KOSPI 200 and TAIEX indices for the coming months offers a direct way to capitalize on this potential rebound. Given their underperformance, the upside could be more significant here than in developed markets that have already recovered more strongly.<\/p>\n
A more cautious approach could involve a pairs trade, going long a developed market index like the S&P 500 while simultaneously shorting a broader emerging market basket. This strategy would benefit from the current trend of developed market outperformance we’ve observed since the start of the year. We would use a significant recovery in Korean and Taiwanese holdings as the primary signal to close this trade.<\/p>\n
A return of confidence in these Asian tech hubs would also boost their currencies. The South Korean won has strengthened to 1,310 against the dollar, up from over 1,400 during the worst of the sell-off in 2025, but it remains historically weak. Using FX options to bet on further appreciation of the won and the New Taiwan dollar provides another way to position for this normalization of global risk.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Equities lead risk-appetite recovery, though holdings lag. Developed markets rebound faster; Korea and Taiwan remain weak.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45505","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45505"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45505\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}