Foreigners Are Returning... KOSPI Nears 3140 Mark Ahead of '5-Day Lion' Event

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 7th, the domestic stock market closed higher. The upward trend was driven by Samsung Electronics' strong earnings and continued foreign buying.

The KOSPI opened at 3,129.07 (up 1.99 points, 0.06%) and closed at 3,137.41 (up 10.33 points, 0.33%). The KOSDAQ started at 969.30 (up 0.67 points, 0.07%) and ended trading at 973.22 (up 4.59 points, 0.47%).

Although individuals took profits, foreign investors maintained a buying advantage for the fifth consecutive trading day, acting as a positive factor. Individuals sold approximately 18 billion KRW and 63 billion KRW in the KOSPI and KOSDAQ markets, respectively. Institutions sold 325.2 billion KRW in the KOSPI market but bought 8.6 billion KRW in the KOSDAQ market. Foreign investors net purchased about 321.5 billion KRW and 55.8 billion KRW in the two markets, respectively.

Experts cited the easing of long-term interest rates as the background for the change in foreign investor 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. 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 emerged, but interest rates and the dollar did not rise and moved in the opposite direction. The easing of tightening concerns and the observation that the dollar's strength has reached a critical point are attracting foreign investors."

He added, "Concerns about the Biden administration's regulatory tightening have also emerged within the Democratic Party, leading to growth stocks, which had been suppressed in the U.S. market, rising. Overall, an environment conducive to a rally may be forming."

As the full-scale earnings season approaches and the performance improvement of domestic companies becomes more prominent, foreign buying is likely to continue for the time being. 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 basic driving force for the stock market rebound. 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 to continue for some time."

Meanwhile, by sector in the KOSPI, textile and apparel (+1.76%), finance (+1.48%), and paper and wood (+1.12%) showed strength, while medical precision (-0.36%), services (-0.23%), and electrical and electronics (-0.14%) closed lower. In the KOSDAQ, finance (+2.58%), publishing and media reproduction (+2.18%), and non-metallic (+2.14%) sectors were strong, while chemicals (-0.67%), telecommunications equipment (-0.64%), and semiconductors (-0.60%) closed lower.

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