Foreigners Have Been Selling KOSPI for Ten Days Straight, "Only Individuals Are Selling"... Attempting the 2220 Level

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] The KOSPI rebounded after a day and recovered the 2200 level, increasing its intraday gains. Supported by the positive momentum from the U.S. stock market, net purchases by foreigners are also contributing to the index's rise.

As of 10:57 a.m. on the 14th, the KOSPI recorded a 2.54% increase at 2217.72, attempting to break through the 2220 level. The KOSPI opened at 2200.66, up 37.79 points (1.75%). The KOSDAQ also expanded its gains, rising 3.98% to 677.53. It opened at 665.17, up 13.58 points (2.08%).

The New York stock market experienced a rollercoaster ride, plunging after the September Consumer Price Index (CPI) exceeded expectations, but then sharply rebounding to close higher. On the 13th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 30,038.72, up 827.87 points (2.83%) from the previous close. The Standard & Poor's (S&P) 500 index rose 92.88 points (2.60%) to 3,669.91, and the tech-heavy Nasdaq index closed at 16,649.15, up 232.05 points (2.23%). The S&P 500 ended a six-day losing streak and rebounded for the first time in seven trading days.

Han Ji-young, a researcher at Kiwoom Securities, said, "The overnight surge in the U.S. market is presumed to be due to the easing of financial concerns from the UK, including the British pound and government bond yields falling following partial additional changes to the UK government's tax cut plan." She added, "The influx of short-covering from the surge in short positions caused by recent extreme market volatility and technical buying signals at low prices also seem to have influenced the upward supply-demand factors."

Seo Sang-young, a researcher at Mirae Asset Securities, stated, "Although the Nasdaq initially plunged more than 3% due to the high inflation data release, it surged more than 5% from the low point after digesting the news, which had a positive impact on the Korean stock market."

In the KOSPI market, foreigners have been net buyers for 10 consecutive trading days, leading the index's rise. Currently, foreigners and institutions are net buying 194.8 billion KRW and 141.3 billion KRW respectively, while individuals are net sellers alone, offloading about 330.7 billion KRW.

Most of the top market capitalization stocks are rising. Semiconductor and battery stocks such as Samsung Electronics (1.8%) and LG Energy Solution (2%) are increasing, while recently sluggish internet sector stocks like Naver (5.3%) and Kakao (7.4%) are sharply rebounding. On the KOSDAQ, Kakao Games surged significantly by 15.59% following news of its subsidiary's IPO cancellation.

However, voices cautioning about continued volatility remain strong. The direction is still unpredictable. Researcher Seo said, "The burden is that the recession period is approaching rapidly," adding, "Although the Korean stock market started higher, the direction is expected to be determined by changes in the U.S. dollar."

Lee Kyung-min, a researcher at Daishin Securities, also said, "Since the market dropped sharply due to option expiration the previous day, a sharp rebound is possible today, but in the long term, it is only a short-term relief." He warned, "We need to be cautious about the possibility of further declines due to fundamental variables such as recession and earnings deterioration."

Meanwhile, Jamie Dimon, Chairman of JP Morgan Chase, stated at the International Institute of Finance (IIF) membership annual meeting held in Washington DC that if a 'severe recession' scenario is assumed, the market could fall 20-30% more than it is now.

Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, said, "As investors digest inflation data and the earnings season begins, stock market volatility will continue," adding, "There are still many factors that can cause volatility." Greg Swenson, founding member of investment bank Brigg Macadam, warned, "Getting excited about the current rally could be a mistake," and said, "It is close to a bear market rally, and worse news is expected," urging preparation for greater volatility.

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