Foreigners' Return Stabilizes KOSPI at 3130... Will the Upward Momentum Continue?

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 7th, the domestic stock market, which started higher, maintained a slight upward trend, settling around the 3130 level thanks to foreign investors' buying. Foreign investors have shown a buying preference for five consecutive trading days, acting as a positive factor for the market.

On the 7th, the KOSPI opened at 3129.07, up 1.99 points (0.06%). The KOSDAQ started at 969.30, up 0.67 points (0.07%). As of 1:38 PM, the KOSPI was at 3132.23, up 0.16% from the previous day, and the KOSDAQ was at 972.76, up 0.43%.

With foreign investors showing a buying preference, interest in their return is high. Individual investors are buying 41.5 billion KRW in the KOSPI market and selling 26.8 billion KRW in the KOSDAQ market. Institutions are selling 219.9 billion KRW in the KOSPI market and buying 2.3 billion KRW in the KOSDAQ market. Meanwhile, foreign investors are buying 165.6 billion KRW and 30.4 billion KRW in the two markets, respectively.

Experts cite the calming trend in long-term interest rates as the background for the change in foreign investors' supply and demand. Park Seok-hyun, head of investment strategy at KTB Investment & Securities, said, "The sharp rise in U.S. Treasury yields was a burden, but as the surge has calmed, the supply and demand have stabilized," adding, "Even if tightening policies change, the speed and intensity are expected to be communicated sufficiently with the market, so the basic buying trend will continue."

Jung Myung-ji, head of investment information at Samsung Securities, said, "Since last week, surprising data related to U.S. employment and manufacturing have come out, but interest rates and the dollar did not rise and moved in the opposite direction," adding, "The easing of tightening concerns and the observation that the dollar's strength has reached a critical point are attracting foreign investors."

As the full-fledged 'earnings season' approaches and the performance improvement of domestic companies becomes more prominent, foreign buying is likely to continue for the time being. The earnings season officially begins with the preliminary first-quarter earnings announcements of Samsung Electronics and LG Electronics on this day.

Kim Yumi, a researcher at Kiwoom Securities, forecasted, "The Korean stock market is expected to change depending on Samsung Electronics' preliminary earnings results today, and since the semiconductor sector's rebound was rapid recently, the possibility of profit-taking after major announcements cannot be ruled out." She added, "However, if the results do not deviate significantly from solid market expectations, the downside is expected to be limited," and noted, "The overnight U.S. stock market saw a 6 basis point drop in U.S. Treasury yields and a 0.3% decline in the dollar index, which is expected to create a favorable environment for foreign investors' supply and demand."

Jung said, "Concerns about regulatory tightening by the Biden administration have emerged even within the Democratic Party, and growth stocks, which had been suppressed in the U.S. market, are rising," adding, "Overall, an environment conducive to a rally can be created."

Kang Bong-ju, a researcher at Meritz Securities, said, "The 12-month expected EPS (earnings per share) forecast for Korea rebounded by 44% after June, serving as the fundamental driver of the stock market rebound," and diagnosed, "Given the recent upward trend in forecasts and the calculation method of the 12-month expected earnings, a monthly increase of around 2% is likely for the time being."

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