As the domestic stock market swung sharply, foreigners and individuals engaged in an unprecedented trading battle on the 5th. In the domestic market, foreigners posted the largest-ever net selling, while individuals logged the largest-ever net buying. With institutions also joining in with 2 trillion won in net selling, nearly 8 trillion won worth of shares flooded the Korea Exchange and KOSDAQ markets at once.
In the Korea Exchange market, foreigners were net sellers of 5.0103 trillion won worth of stocks. Institutions also dumped 2.0692 trillion won, deepening the slide. Individuals bought up all of this, recording 6.7785 trillion won in net buying, but it was not enough to stem the losses.
Foreign investors' selling focused especially on large-cap semiconductor stocks. The sharp overnight drop in U.S. tech shares hurt sentiment. Samsung Electronics and SK hynix plunged 5.80% and 6.44%, respectively, while foreigners were net sellers of 2.5875 trillion won and 1.3749 trillion won in each. The net selling by foreigners in these two names accounted for 79.1% of the total foreign net selling that day, making up most of it.
The recent sharp swings in the won-dollar exchange rate also appear to have dampened foreign investor sentiment. The rate opened at 1,461 won, up 10.8 won from the previous day, and ended the day's session near 1,470 won, up by nearly 20 won.
In the KOSDAQ market as well, foreigners were net sellers of 286.1 billion won and institutions 539.9 billion won. In response, individuals were net buyers of 903.4 billion won, the third-largest on record after Dec. 29, 2021 (1.1556 trillion won) and on Jan. 21 (955.3 billion won). Even so, the KOSDAQ index fell 3.57%, sliding from 1,149.43 to 1,108.41.
Brokerages said that after earnings announcements in the semiconductor sector, foreign investors are taking profits, driving a rotation, and that short-term volatility could expand further on domestic and overseas issues.
Lee Jae-won, a researcher at Shinhan Investment & Securities, said, "After semiconductor earnings, the earnings momentum (upside potential) has faded, and profit-taking by foreigners is emerging," and added, "A rotation into consumer names such as fashion, entertainment, hotels, assets, and airlines is continuing."
While foreigners are leaving the domestic stock market in droves, individual money is flowing in. This is evident in the sharp increase in idle funds that show individual investors' appetite for stocks. According to the Korea Financial Investment Association, investor deposits this month reached 111 trillion won, an all-time high. The number of domestic stock trading accounts (accounts with at least 100,000 won in deposits and a transaction record within six months) has surpassed 100 million.
Jung Won-il, a researcher at Sangsangin Investment & Securities, said, "It is necessary to approach the market with a clear distinction between events and fundamentals, and to focus more on the direction of the index explained by the economic momentum," and added, "Depending on the U.S. consumer price index (CPI) to be released next week, short-term volatility could expand."