On the Day Donghak Ants Cried "Stop 국민연금 Selling," Institutions Poured 1 Trillion Won... Pension Funds' Longest 45-Day Net Selling Streak

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 4th, the domestic stock market closed lower. The domestic stock market, which started lower due to the rise in U.S. Treasury yields, showed a sluggish trend as the rebound was hindered by selling pressure from institutions and foreigners during the session. Only individual investors were net buyers, but their buying was insufficient to absorb the selling pressure and generate upward momentum. The securities industry expects a correction trend to be inevitable for the time being.

On that day, the KOSPI closed at 3,043.49, down 1.28%. The KOSDAQ closed at 926.20, down 0.49%. The KOSPI started at 3,076.88, down 0.20%, and showed a weak performance as it fell more than 1% during the session. The KOSDAQ also started at 929.09, down 0.18%, and fell more than 1% during the session before slightly narrowing the decline in the afternoon.

Amid the burden cast on the stock market by the rise in U.S. Treasury yields, the sluggish market performance was led by institutional selling.

Institutions were net sellers of about 1.2826 trillion KRW in the KOSPI market. In the KOSDAQ market, they were net sellers of 58.9 billion KRW. The selling pressure mainly came from financial investment firms. Financial investment firms were net sellers of 959.9 billion KRW in the KOSPI market, and pension funds were net sellers of 322 billion KRW in the KOSPI market. Pension funds, the 'big players' in the domestic stock market, set a new record of 45 consecutive trading days of net selling since December 24 of last year. This is the longest period in history. The selling spree by pension funds has increased dissatisfaction and anxiety among individual investors. In this regard, the Korea Stock Investors Association (HanTuYeon) held a rally in front of the National Pension Service headquarters last week urging a halt to selling. Jung Eui-jung, chairman of HanTuYeon, criticized, "The National Pension Service's plan to continue mechanical selling of more than 20 trillion KRW by the end of the year, tied to the 16.8% target, is a clear act of betrayal against individual investors who have led the index's rise."

Foreigners also recorded net selling in both markets. They sold 931.9 billion KRW in the KOSPI market and 106.4 billion KRW in the KOSDAQ market. Only individual investors defended the market decline alone. Individuals were net buyers of 2.1968 trillion KRW in the KOSPI market and 165.9 billion KRW in the KOSDAQ market.

Most sectors showed a downward trend. Only a few sectors such as Food (0.86%), Textile and Apparel (0.02%), Non-metallic Minerals (0.98%), Steel and Metals (1.83%), Construction (0.56%), and Distribution (0.83%) closed higher.

Among the top market capitalization stocks, most showed weakness, including Samsung Electronics (-1.90%), SK Hynix (-3.40%), Naver, and LG Chem (-0.57%). Celltrion (1.16%) and POSCO (3.34%) closed strong. The slowdown in upward momentum led to a market characterized by individual stock movements.

Seo Sang-young, a researcher at Kiwoom Securities, pointed out, "The U.S. stock market fell again, mainly due to selling pressure on tech stocks and some theme stocks with high value burdens, using the excuse of rising interest rates, which is a burden," adding, "The rise in U.S. Treasury yields could ultimately burden foreign demand in emerging markets." He further forecasted, "Considering this, the Korean stock market is expected to start lower and continue a sector-differentiated market, similar to the characteristics of the U.S. stock market."

Lee Kyung-min, a researcher at Daishin Securities, said, "The recent global stock market's sensitive reaction to interest rate variables reflects weak confidence in fundamentals," and added, "Considering the base effect, the economic stimulus measures implemented so far, and the additional stimulus measures to be implemented soon by the Biden administration, it seems that more time is needed to be confident in economic recovery."

However, the market is expected to rise after the correction ends. Lee Eun-taek, a researcher at KB Securities, said, "The correction is caused by concerns about tightening due to the economy being too good," and added, "After digesting the uncertainties in early March, a market rebound is possible, and it is better to focus on the second half of the year rather than the first half."

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