[Weekly Market Review] KOSPI Firm at 2770 Level, Foreign and Institutional Selling Met by Individual Investors' 2 Trillion Won Buying Response

[Asia Economy Reporter Oh Ju-yeon] In the third week of December (14-18), despite simultaneous selling by foreigners and institutions, individual investors defended the KOSPI index by net buying over 2 trillion won within a week. Due to valuation burdens from the short-term surge and noise surrounding the U.S. additional economic stimulus agreement, individual investors picked up stocks whenever the index fell during the trading day, resulting in the KOSPI closing slightly higher between the 2750 and 2780 range last week. However, the securities industry maintains the view that while the bullish outlook for next year's stock market remains valid, the possibility of a short-term correction should be kept open, drawing attention.

According to the Korea Exchange on the 19th, in the third week of December, foreigners net sold stocks worth 1.0988 trillion won in the KOSPI market, and institutions sold 888.5 billion won worth of stocks. On the other hand, individual investors bought stocks worth 2.1158 trillion won, defending the index from falling.

During this period, the stocks most purchased by individuals were Samsung Electronics (777.8 billion won) and Samsung Electronics Preferred Shares (749.8 billion won). As foreigners released shares to realize profits from the volume they had bought over the past month, individuals stepped in to buy them.

Samsung Electronics shares rose 28.57% from the closing price of 57,400 won on November 2 to 73,800 won on December 16. In November alone, foreigners net bought nearly 5 trillion won worth of stocks in the KOSPI market, including 1.4 trillion won worth of Samsung Electronics shares, which helped drive up the stock price. However, this month, as profit-taking sales emerged, foreigners sold 1.2487 trillion won worth of Samsung Electronics shares in December. Samsung Electronics Preferred Shares also ranked first and second in net selling, with 1.3692 trillion won sold.

Individuals focused on picking up these Samsung Electronics shares that flooded the market. The top two stocks net bought by individuals this month were Samsung Electronics and Samsung Electronics Preferred Shares, with purchases of 1.8772 trillion won and 1.5247 trillion won, respectively.

In addition, over the past week, individuals sequentially net bought Shinhan Financial Group (104.1 billion won), KB Financial Group (94.6 billion won), Hyundai Motor (89.5 billion won), Big Hit (79.3 billion won), and NAVER (79.1 billion won).

Whenever foreigners released profit-taking sales causing intraday volatility in the index, individuals stepped in to buy, resulting in the index closing at the 2770 level last week.

However, the recent rise in daily confirmed cases of COVID-19 in South Korea exceeding 1,000 is spreading unease, which could also impact the stock market. Although the need for social distancing at level 3 is emerging, if implemented, economic damage would be inevitable, potentially causing volatility.

A securities industry official explained, "The situation where foreigners and institutions are net selling while individuals are net buying continues daily," adding, "Foreigners and institutions are realizing profits mainly on stocks that individuals have recently net bought, such as Samsung Electronics and financial stocks." He further diagnosed, "Progress in the U.S. additional stimulus agreement and expectations for a Brexit-related agreement between the UK and the EU are positive news for the stock market, but the rise in domestic COVID-19 cases beyond 1,000 could provide an excuse for profit-taking."

This content was produced with the assistance of AI translation services.