Foreigners and Institutions Returning? 'Joint Buying Breeze'... Exhausted Individuals Sell 800 Billion Won in KOSPI Box Range

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 12th, the domestic stock market closed higher. Influenced by the rise in the U.S. stock market, the domestic market started higher and expanded its gains during the session, supported by simultaneous buying from foreigners and institutions, closing with a gain of over 1%. Only individual investors, tired of the box market, showed a net selling bias.

On that day, the KOSPI closed at 3,054.39, up 1.35% from the previous day. It started at 3,030.73, up 0.57%, and maintained an upward trend throughout the session, expanding gains to around 1%. The KOSDAQ ended the day at 925.49, up 1.93%. The KOSDAQ also started at 910.41, up 0.26%, and increased its gains by the close.

The upward start was largely influenced by the U.S. stock market. Major indices on the New York Stock Exchange rose sharply, supported by improved U.S. unemployment data, the European Central Bank (ECB)'s measures to curb bond yield increases, and President Joe Biden's signing of the $1.9 trillion stimulus bill. On the 11th (U.S. time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 32,485.59, up 188.57 points (0.58%) from the previous session. The Standard & Poor's (S&P) 500 index rose 40.53 points (1.04%) to 3,939.34, and the tech-heavy Nasdaq index surged 329.84 points (2.52%) to 13,398.67. The Dow continued its record-high streak, and the S&P 500 surpassed its previous all-time high recorded on February 16.

The intraday expansion of gains was driven by simultaneous buying from institutions and foreigners. Foreigners net bought 405.6 billion KRW and 162.5 billion KRW in the KOSPI and KOSDAQ markets, respectively. Following the previous day, foreigners maintained a net buying trend, raising expectations for their return.

Institutions halted their net selling streak and contributed to the market rise with net buying on this day. They net bought 184.2 billion KRW and 16.1 billion KRW in the KOSPI and KOSDAQ markets, respectively. However, pension funds showed a net selling streak for 51 consecutive trading days. They net bought 12.4 billion KRW in the KOSDAQ market but sold 84.5 billion KRW in the KOSPI market. The pension funds have been selling continuously since December 24 of last year, with net sales exceeding 14 trillion KRW during this period. The industry expects the pension funds' selling trend to continue. According to the recent annual average increase of about 6.4 trillion KRW in the National Pension Fund's asset management scale over the past few years, pension funds need to dispose of 26 trillion KRW in domestic stocks this year. Since pension funds have net sold about 14 trillion KRW so far this year, it is calculated that they need to sell an additional 12 trillion KRW.

Individual investors, exhausted by the rollercoaster market, continued net selling despite the market's rare rise. They net sold 599.3 billion KRW and 172.4 billion KRW in the KOSPI and KOSDAQ markets, respectively.

By sector in the KOSPI, the electrical and electronics sector (+2.48%) showed notable gains, along with transportation equipment (+2.45%) and construction (+2.03%). Other sectors such as non-metallic minerals (+1.94%), pharmaceuticals (+1.91%), and services (+1.90%) also closed higher.

Samsung Electronics closed at 82,800 KRW, up 0.98%, and 18 of the top 20 market capitalization stocks showed gains.

Samsung Biologics closed at 743,000 KRW, up 3.92%, LG Electronics (+3.39%) and Hyundai Mobis (+3.23%) rose, while KB Financial (-3.08%) and POSCO (-0.66%) closed lower.

In the KOSDAQ sector, the telecommunications and broadcasting services sector (+3.81%) showed notable gains, along with manufacturing (+2.12%), accommodation and food services (+2.00%), and IT hardware (+1.99%) sectors. Among the top 20 market capitalization stocks, 17 showed gains. Alteogen closed at 150,000 KRW, up 6.99%, KMH (+4.71%) and Celltrion Healthcare (+3.17%) rose, while HLB (-3.95%), Rino Industrial (-1.02%), and SK Materials (-0.46%) declined.

Seo Sang-young, a researcher at Kiwoom Securities, explained, "The ECB's comments on controlling interest rate increases and the stabilization of U.S. Treasury yields led to improvements in tech stock prices. The inflow of buying from foreigners and institutions into the domestic market also helped the index rise."

However, caution is required for the volatile market in the near term. Lee Jae-sun, a researcher at Hana Financial Investment, said, "The domestic stock market is likely to continue a volatile trend due to major countries' inflation and domestic demand indicators acting as factors for interest rate direction, and with the U.S. March FOMC meeting on the 17th approaching. The possibility of a clear improvement in trend-based risk asset preference is not evident."

An So-eun, a researcher at IBK Investment & Securities, explained, "In the short term, the market is expected to show a box market trend until the end of March. While concerns about rising interest rates continue, expectations for economic recovery or earnings will act as momentum for a future rebound."

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