Citigroup Downgrades South Korea's Stock Rating to Neutral on AI Sector Rotation

According to Citigroup, on July 20, the bank downgraded South Korea's stock market rating from Overweight to Neutral, citing recent volatility in semiconductor stocks and a shift to reduce exposure to artificial intelligence-focused investments.

The adjustment comes as investors have faced increased turbulence in the market, driven by retail enthusiasm for leveraged single-stock ETFs and valuation concerns. While Citigroup maintains a structurally bullish outlook on the AI sector overall, the bank is adopting a more cautious stance specifically toward the Korean market.