KOSPI Returns Gains, Foreigners Hold 'Sell Positions'... Only Individuals Buy

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] On the 16th, the domestic stock market, which started higher, gave up all its gains and is showing a downward trend. Although it opened higher buoyed by the rise in the New York stock market, the combined selling by foreigners and institutions ultimately triggered the index decline.

The KOSPI index started the session up 11.98 points at 3165.38 (0.38%↑), and the KOSDAQ index opened 5.06 points higher at 1047.85 (0.49%↑), but both quickly turned downward and the decline is widening.

As of 10:54 a.m., the KOSPI is down 0.53% at 3136.58, and the KOSDAQ is down 0.27% at 1039.99.

The combined selling by foreigners and institutions is driving the index down. Foreigners are net sellers of 156.5 billion KRW and 148.4 billion KRW in the KOSPI and KOSDAQ markets, respectively. Institutions also have a selling bias with 208 billion KRW and 50.5 billion KRW net sales, respectively. Only individuals are net buyers, showing net purchases of about 342.2 billion KRW and 222.9 billion KRW, respectively.

Seo Sang-young, a researcher at Mirae Asset Securities, said, "The U.S. stock market showed a mixed trend in a narrow range before expanding gains in the afternoon, which is expected to have a positive impact on the Korean stock market. However, considering that the rise is due to individual factors, the expansion of gains is likely to be limited." He added, "Moreover, with the U.S. futures and options expiration tomorrow and the upcoming Chuseok holiday next week, if active foreign investor activity does not continue, the possibility of profit-taking sales cannot be ruled out."

Although the KOSPI is attempting a rebound at the 200-day moving average after falling below the 120-day moving average, it appears that the Ichimoku cloud is acting as resistance, making it difficult to break through the resistance level, according to some advice.

Since the September futures expiration on the 9th, the KOSPI has risen for four consecutive days until the previous day, but the overall price trend seems to be in a correction phase. During the mid-August correction, the support levels at the July lows and the 120-day moving average were breached downward, and during the rebound process continuing until early September, the July lows and the lower boundary of the cloud were confirmed as resistance before the index declined again.

Jeong In-ji, a researcher at Yuanta Securities, analyzed, "Looking at the trend since early July, the market is progressing in a stair-step downward structure, so even if a short-term rebound phase continues, the upside is likely to be limited. The intraday lows on August 20 and September 10 were formed around the 200-day moving average level, and the September lows are higher than those in August, indicating that the low-price buying demand is not weak yet. However, as long as the Ichimoku cloud acts as resistance, the medium to long-term outlook favors a downward possibility."

He continued, "So far, the 200-day moving average has acted as support, but if it is breached, the correction could deepen. The USD-KRW exchange rate has formed a box range since the beginning of the year and is currently forming a stair-step upward structure by breaking above the upper boundary of the box. If this trend continues, the KOSPI is also likely to face additional medium-term correction risks."

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