Foreign investors have dumped positions worth trillions of won for three straight sessions in Korea's stock market, seen as driven by mounting concerns over forex losses amid a sharp rise in the won-dollar exchange rate. By contrast, retail investors have been net buyers for four sessions in a row, partly cushioning the index's decline. As the market has swung between corrections and rebounds lately, some analysts say buying sentiment based on learned behavior remains intact.
On the 6th, according to the Korea Exchange (KRX), the KOSPI closed at 4,026.45, up 22.03 points, or 0.55%, from the previous session. The index opened at 4,092.46, up 88.04 points, or 2.20%, from the day before and briefly reclaimed the 4,100 level intraday, but then turned lower, slipped below 4,000, and rebounded slightly.
Individuals and institutions lifted the index with net purchases of 884.7 billion won and 830.2 billion won, respectively. Foreigners, meanwhile, were net sellers of 1.6951 trillion won.
Foreigners have remained net sellers in Korea's stock market this month. Notably, they recorded net selling in the trillion-won range for three straight sessions. This is the first time since U.S. President Donald Trump signaled reciprocal tariff measures in Apr. The cumulative net selling by foreign investors over the past three sessions reached 6.4951 trillion won, larger than the 4.1583 trillion won logged then (Apr. 3–7).
The surge in the won-dollar exchange rate is cited as the main reason behind the foreign sell-off. In the Seoul foreign exchange market, the won-dollar rate stood at 1,447.7 won as of 3:30 p.m., down 1.7 won from the previous day. Considering that foreigners' estimated average purchase rate from late Apr., when they turned to "buy" in the main board, through Oct. was 1,391 won, they are sitting on about a 4% forex loss.
In global markets, concerns over short-term liquidity and the impact of the U.S. government shutdown have been building, while fears of capital outflows are growing with the rise in the dollar index. The dollar index climbed to 100.36 the day before and then lost some momentum, but it still hovered above 100, keeping risk sentiment on edge. The dollar index measures the dollar's value against the currencies of six major countries; a reading above 100 means the dollar is relatively strong.
Lee Kyung-min, a researcher at Daishin Securities Co., said, "With the dollar index still above 100 and the won weakening to the high-1,440 range, caution is warranted," and noted, "It appears risk sentiment has not been fully resolved."
Semiconductor stocks led gains in the domestic market that day. Shaking off worries about an artificial intelligence (AI) bubble, Micron, one of the three memory chip majors, jumped 8.9% to a record high, helping SK hynix rebound. Semiconductor-related names broadly rose, including WONIK IPS Co. and ISU PETASYS. However, Samsung Electronics fell 1,400 won, or 1.39%, to finish at 99,200 won.
Financials and holding companies were also strong on remaining policy momentum such as the introduction of separate taxation on dividend income and mandatory cancellation of treasury shares. With foreign and institutional buying flowing in together, Hana Financial Group, KB Financial, and HD Hyundai advanced. In contrast, Mirae Asset Securities fell 1,100 won, or 4.44%, as third-quarter operating profit dropped 39.9% from a year earlier.
In retail, Hyundai Department Store closed up 5,300 won, or 6.39%, at 883,00 won after its third-quarter results showed improved operating profit and profitability. Shinsegae, Lotte Shopping, and GS Retail also rose broadly. By contrast, APR and d'Alba Global plunged 10.52% and 20.51%, respectively, after posting third-quarter results below market expectations. Cosmetics names broadly fell, including SILICON2 and PharmaResearch.
The KOSDAQ index closed at 898.17, down 3.72 points, or 0.41%, from the previous session. The index opened at 915.43, up 13.54 points, or 1.50%, from the previous session, but pared gains and turned lower. Foreigners alone dumped 131.9 billion won, while individuals and institutions were net buyers of 131.3 billion won and 5.7 billion won, respectively.
Alteogen, the top KOSDAQ stock by market cap, ended up 18,000 won, or 3.40%, at 547,000 won on expectations of a KOSPI transfer listing. By contrast, robot names such as Rainbow Robotics, Clobot, and ROBOTIS, where expectations had run ahead of fundamentals recently, finished weaker on profit-taking.