As military clashes among the United States, Israel, and Iran have continued for more than a month, a large-scale tug-of-war over supply and demand is unfolding between foreign and retail investors in the domestic stock market. Foreign investors made a net sale of stocks on a record monthly scale, while retail investors bought most of them, propping up the market.
According to the Korea Exchange (KRX) on the 29th, from the 3rd to the 27th of this month, foreign investors made a net sale of 30.263 trillion won in the KOSPI market. This is the largest amount on a monthly basis on record. During the same period, retail investors made a net purchase of 30.688 trillion won, effectively absorbing foreign sales. It is also the largest monthly net purchase by retail investors. During this period, the KOSPI index fell more than 12%, marking the steepest decline among major stock markets.
Foreign investors' selling offensive was concentrated in large-cap stocks. Samsung Electronics alone saw more than 15 trillion won in net selling this month. About half of the total net selling was concentrated in a single stock. As a result, the foreign equity ratio in Samsung Electronics fell to 48.9%, the lowest level in about 12 years and 6 months. In contrast, retail investors responded by making a net purchase of more than 15 trillion won in Samsung Electronics during the same period.
This foreign capital outflow is analyzed as the result of a combination of risk-off sentiment due to the war and the impact of rising international oil prices and the won-dollar exchange rate. In addition, concerns about a slowdown in semiconductor demand stemming from changes in artificial intelligence (AI) technology at global big tech companies also dampened investor sentiment.
By sector, defense stocks showed relative strength, reshaping the landscape among top market-cap names. Hanwha Aerospace ranked No. 1 in net foreign buying, and its market capitalization rose about 12%, while LIG Nex1 and Hanwha Systems also climbed together. In contrast, sectors centered on export plays such as Hyundai Motor, Kia, and HD Hyundai Heavy Industries saw their market capitalizations decline and rankings fall due to the burden of a strong dollar and high oil prices.
The market is watching the possibility that if geopolitical risks persist, foreign capital outflows and sector divergence will continue. An industry official said, "Since the war, foreign investors have been cutting their weights in former leaders such as semiconductors and autos," adding, "How much Middle East risk will be transmitted to corporations' earnings will determine the market's direction."