Returning Foreigner 'Gift of 1.5 Trillion Won Storm of Net Buying'... KOSPI Eyeing 2450 Again

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] The momentum is truly unstoppable. The KOSPI continues to maintain a gain of over 2% into the afternoon session. Foreign investors are leading the index rise by net buying 1.5 trillion KRW worth of futures contracts.

As of 1:38 PM on the 13th, the KOSPI is trading at 2448.97, up 2.70% from the previous trading day. The KOSPI opened at 2418.59, up 34.31 points (1.44%). Shortly after the opening, it quickly recovered the 2420 and 2430 levels, and by around noon, it had risen to the 2440 level.

The KOSPI's rise is driven by combined net buying from foreigners and institutions. Foreigners and institutions have purchased approximately 307.2 billion KRW and 584.6 billion KRW respectively. In particular, foreigners are net buying 1.4983 trillion KRW worth of KOSPI 200 index futures. On the other hand, individual investors are realizing profits by selling 878.7 billion KRW.

The overnight New York stock market showed broad gains as expectations grew for a slowdown in the US August Consumer Price Index (CPI), which contributed to improved investor sentiment.

Regarding the US August CPI, which will be announced this evening Korean time, the market predicts an 8.0% increase year-over-year and a 0.1% decline month-over-month. During the Chuseok holiday, the European Central Bank (ECB) raised interest rates by 75 basis points, and the dollar index also showed signs of easing, which acted as a factor for foreign capital inflow.

Lee Jin-woo, a researcher at Meritz Securities, explained, "The reason the US stock market rose during the holiday was that expectations for inflation indicators were priced in early, providing a rationale for the market rebound. The dollar also showed stability, and these factors combined have led to large-scale net buying in the futures market." He added, "After the inflation data release, there is a possibility that the US stock market and the KOSPI will move in step."

However, opinions suggest that it remains to be seen whether the KOSPI will continue its upward trend. Chae Hyun-gi, a researcher at Cape Investment & Securities, said, "Given that global stock markets showed good returns during the Chuseok holiday, the domestic market may show an upward trend this week, but there are some volatility factors such as the Federal Open Market Committee (FOMC), making it difficult to predict a clear trend direction. Both upside and downside are possible depending on the results of indicators." He continued, "At this point, the condition for the market to rebound is whether the Federal Reserve's tightening stance in 2023 will ease due to a rapid easing of inflation. Among the CPI data, the core inflation index is expected to be very significant in forecasting the market's future direction."

Han Ji-young, a researcher at Kiwoom Securities, advised, "Until the September FOMC, it is appropriate to maintain the current stock allocation rather than actively increasing it, and to prepare proactively."

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