Korean equity ETFs opened sharply lower this morning, with leveraged products tracking major tech names bearing the brunt of the sell-off. The CSOP Two Times Leveraged Samsung Electronics (07747) dropped 7.13% to HK$70.86, while the CSOP SK hynix Daily Leverage Max 2X Product (07709) fell 6.62% to HK$41.18. The TR Korea (02848) declined 3.83% to HK$1,835, and the CSOP KOSPI (03121) slipped 2.91% to HK$6.675.

Market sentiment deteriorated as South Korea's benchmark KOSPI index opened 3.29% lower, with heavyweight stocks Samsung Electronics and SK hynix both sliding more than 4% during intraday trading. The weakness follows the Bank of Korea's Thursday statement indicating that, given persistently elevated inflation and expectations of sustained robust economic growth, the central bank will assess both domestic and external conditions to determine the timing and pace of further rate hikes.

Overnight, a confluence of negative factors weighed on high-valuation growth stocks. A hotter-than-expected US producer price index reading, combined with oil prices breaking through a key resistance level, fueled a sudden surge in market bets for a Federal Reserve rate hike next week. Additionally, the European Central Bank raised its benchmark rate by 25 basis points and upgraded its inflation forecasts. All eyes are now on today's US CPI release, which will serve as the final inflation data point Federal Reserve officials receive before their upcoming policy meeting.