Foreign investors maintained a selling advantage in the Korean stock market for eight consecutive months, marking the second-longest streak of 'selling'. Analysis suggests that the fear of President Donald Trump's tariff war overshadowed expectations for a resumption of short selling.
According to the Korea Exchange on the 31st, foreign investors sold a net total of 1.5754 trillion won in the KOSPI market that day. This marks the largest net selling amount in a single day since Jan. 27, 2022 (1.7141 trillion won). Foreigners also had a selling advantage of 215 billion won in the KOSDAQ market that day.
After a massive sell-off by foreign investors in just one day, the total net selling by foreigners in the domestic stock market for March reached 2.1452 trillion won. This sets a record for eight consecutive months of 'selling' since last August. The last time foreigners had sold for eight consecutive months was from February to September of 2002. The longest continuous net selling streak was for 11 months from June 2007 to April 2008, just before the global financial crisis.
A significant portion of the stocks sold by foreigners was Samsung Electronics. Factors contributing to this include Samsung Electronics' diminishing presence in the artificial intelligence (AI) semiconductor market, including high bandwidth memory (HBM), and the decline in prices of general-purpose memory semiconductors.
However, foreigners have begun purchasing Samsung Electronics shares this month, with a net buying amount of 1.472 trillion won. This is the first time they have shown a buying advantage on a monthly basis since July of last year. This indicates that the selling pressure on Samsung Electronics is expanding rather than being concentrated.
The stock that foreigners sold the most this month was Hanwha Ocean, with a net selling amount of 1.1189 trillion won. Following that were Samsung SDI, Alteogen, Doosan Enerbility, KB Financial, and LG Energy Solution in terms of net selling volume.
The primary reason foreign investment sentiment has weakened is due to concerns over tariffs from the Trump administration. The Trump administration has warned of imposing 'reciprocal tariffs' on April 2. The Wall Street Journal reported that the Trump administration is even considering imposing a universal tariff of 20% on countries worldwide. Amid poor economic and inflation indicators, concerns of stagflation have emerged.
Some expected that with the resumption of short selling in the domestic stock market that day, there would be an influx of foreign capital; however, as risk-averse sentiment increased, foreign selling surged.
There are assessments that it will be difficult for the stock market to rebound in the short term due to the accumulation of stocks by foreign investors. Kim Dae-jun, a researcher at Korea Investment & Securities, noted, 'The KOSPI index has an open lower limit, which means it could fall further, and there are many factors increasing bearish pressure, so time is needed to absorb the shock.'
However, some opinions suggest that the domestic stock market has entered an oversold territory, as it dropped below a price-to-book ratio (PBR) of 0.9 times based on trailing 12 months. Han Ji-young, a researcher at Kiwoom Securities, commented, 'At the current index level, holding shares is a more realistic alternative than selling.'