As Korea's stock market, which had been rising at a breakneck pace, halted its rally this month and turned weak, investor sentiment sharply diverged between foreigners and individuals. While foreign investors posted a record net sell-off, individuals scooped up the shares foreigners put on the market.
According to the Korea Exchange (KRX) on the 30th, foreign investors recorded a net sell-off of 14.456 trillion won in the stock market from the 3rd to the 28th of this month.
This is the largest amount on record for monthly foreign net selling on the KOSPI. The previous record for foreigners' net selling was 12.5174 trillion won (Mar. 2020). As uncertainty in the global economy temporarily spiked due to the COVID-19 pandemic, investor sentiment weakened.
It is the first time in three months that foreigners turned to net selling. In Sep. and Oct. this year, they recorded net purchases of 7.4 trillion won and 5.3 trillion won, respectively, in the stock market. On an annual basis, they have accumulated a net sell-off of 8.8028 trillion won.
The securities industry says foreigners shifted to selling because expectations for interest rate cuts weakened and because U.S. mega-cap tech stocks underwent a correction.
The Federal Open Market Committee (FOMC) regular meeting is scheduled for Dec. 9–10 (local time), and Commissioners are split on whether to cut the benchmark interest rate then.
In addition, analyses have emerged that artificial intelligence (AI) has limits to its commercial viability and is seeing overinvestment, prompting a correction in U.S. tech stocks and dampening sentiment toward semiconductor shares. Nvidia shares have fallen 14.5% this month, and Microsoft has dropped 9.2%.
The stock foreigners sold the most in Korea this month was SK hynix. They posted a net sell-off of 8.731 trillion won. Samsung Electronics also saw a net sell-off of 2.229 trillion won. Of foreigners' KOSPI net selling this month, 76% was concentrated in the two stocks Samsung Electronics and SK hynix.
Doosan Enerbility (787.0 billion won), Naver (606.0 billion won) and KB Financial Group (558.0 billion won) also ranked among the top stocks by foreigners' net selling.
By contrast, individual investors showed net buying in the stock market this month. Through the 28th, individuals' KOSPI net purchases totaled 9.287 trillion won, the third largest on record.
The stock individuals bought the most was SK hynix. They recorded net purchases totaling 5.976 trillion won. Samsung Electronics also saw net purchases of 1.29 trillion won.