Foreigners' 'Flash Rally' Over? Net Buying Streak Ends After 13 Days

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The net buying spree by foreign investors ended after 13 days. As the Korean stock market fluctuates and struggles around the 2200 level, there are observations that the 'short rally' in the market may have ended following foreign investors' return to net buying the previous day.

According to the Korea Exchange on the 21st, foreign investors continued net buying in the KOSPI market for 13 trading days from the 29th of last month until the previous day, but switched to net selling on the 20th. The 13 consecutive trading days of net buying is the longest period this year, with a total purchase amount of 2.3032 trillion KRW during this period.

Foreign investors mainly bought semiconductor and secondary battery stocks. The top net purchase during this period was SK Hynix with 839.7 billion KRW. This was followed by Samsung Electronics (778.2 billion KRW), LG Energy Solution (197.5 billion KRW), Samsung SDI (153.1 billion KRW), and KT&G (153.0 billion KRW).

On the other hand, the top net sellers included Naver (876.0 billion KRW), Kakao (104.9 billion KRW), Korea Zinc (67.6 billion KRW), POSCO Holdings (63.1 billion KRW), S-OIL (55.4 billion KRW), SKC (51.6 billion KRW), Kakao Bank (50.9 billion KRW), and Kakao Pay (43.3 billion KRW).

It is analyzed that the 'King Dollar' phenomenon, which relatively increased the price merit of the Korean stock market, stimulated foreign investors' sentiment. The won-dollar exchange rate closed at 1,433.3 won the previous day. The won-dollar exchange rate being in the 1400 won range is the first time in 13 years and 6 months since the financial crisis.

Kim Su-yeon, a researcher at Hanwha Investment & Securities, said, "The won has depreciated by 16% this year, creating a price merit," adding, "The KOSPI in dollar terms is at the level of the early COVID-19 pandemic."

There is also an analysis that the Korean stock market gained a windfall from the U.S. announcement of semiconductor export restrictions on China. Researcher Kim said, "The U.S. government's strengthening of semiconductor sanctions against China is attracting foreign funds into domestic semiconductors."

However, the possibility of further declines cannot be ruled out. In fact, the Korean stock market closed lower the previous day and opened at 2,210.59 on the 21st, down 0.34%.

Lee Kyung-min, a researcher at Daishin Securities, pointed out, "This is only a short-term relief sentiment, and the global financial market is still focused on inflation and monetary policy," adding, "The possibility of further declines due to variables affecting fundamentals such as economic recession and corporate earnings cannot be excluded."

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