Foreign investors have halted their buying trend in the domestic stock market and are now selling to realize profits, leading to concerns of a potential short-term correction. According to the Korea Exchange, foreign investors sold 1.13 trillion won in the stock market from the 19th to the 23rd, contrasting with their net purchase of 14.631 trillion won until the 16th of this year. This selling pressure has pushed the KOSPI index back to the 2500 line on the 21st, after it had recovered to the 2600 line amid foreign selling.
Experts attribute this shift in foreign investor behavior to concerns about additional interest rate hikes by the US Federal Reserve (Fed) and profit-taking sales due to rising stock prices. Fed Chairman Jerome Powell’s recent emphasis on the need for two more rate hikes this year has raised worries among investors. Additionally, the divergence in views on tightening between the Fed and the financial market, along with lowered expectations for China’s economic recovery, has tilted market participants’ sentiment towards a wait-and-see approach.
The top stocks in foreign net selling include secondary battery and semiconductor-related stocks, which have recently experienced significant surges. LG Energy Solutions, Samsung SDI, LG Chem, SK Hynix, POSCO Future M, and Ecopro BM were among the net sellers. This foreign selling has increased the possibility of a short-term correction in the domestic stock market.
However, some analysts believe that foreign sales may not last long. Despite selling in the domestic stock market, foreigners continue to buy shares of Samsung Electronics, indicating a preference for the company. The fact that earnings forecasts of domestic listed companies have recently been revised up further supports the notion that foreign selling will be short-lived. Kim Yeong-hwan, a researcher at NH Investment & Securities, highlights the positive outlook for stock prices if the visibility of companies’ earnings turnaround increases.
Overall, while foreign investors have temporarily halted their buying trend and are realizing profits through selling, there are indications that this trend may not last long. The market remains optimistic about the potential for stock prices to rise again, especially with positive earnings forecasts and continued interest in companies like Samsung Electronics.
What indications suggest that the foreign selling in the domestic stock market may be short-lived
Foreign investors have shifted their behavior in the domestic stock market by moving from buying to selling, raising concerns about a potential short-term correction. According to the Korea Exchange, foreign investors sold 1.13 trillion won in stocks from the 19th to the 23rd, contrasting with their previous net purchase of 14.631 trillion won until the 16th of this year. This selling pressure has pushed the KOSPI index back to the 2500 line on the 21st, after it had previously recovered to the 2600 line amid foreign selling.
Experts attribute this change in foreign investor behavior to concerns about potential interest rate hikes by the US Federal Reserve (Fed) and profit-taking sales due to the recent rise in stock prices. The statement from Fed Chairman Jerome Powell emphasizing the need for two more rate hikes this year has raised worries among investors. In addition, the differing views on tightening between the Fed and the financial market, coupled with lowered expectations for China’s economic recovery, have shifted market sentiment towards a more cautious approach.
The primary stocks experiencing net selling by foreign investors include secondary battery and semiconductor-related stocks, which have seen significant surges recently. Companies such as LG Energy Solutions, Samsung SDI, LG Chem, SK Hynix, POSCO Future M, and Ecopro BM were among the net sellers. This increased foreign selling has raised the possibility of a short-term correction in the domestic stock market.
However, some analysts believe that foreign selling may not last long. Despite the selling in the overall market, foreign investors are continuing to buy shares of Samsung Electronics, indicating their preference for the company. Additionally, the fact that earnings forecasts for domestic listed companies have been revised up recently supports the idea that the foreign selling may be short-lived. Kim Yeong-hwan, a researcher at NH Investment & Securities, highlights the positive outlook for stock prices if the visibility of companies’ earnings turnaround improves.
In conclusion, while foreign investors have temporarily halted their buying trend and are now realizing profits through selling, there are indications that this trend may not last long. The market remains optimistic about the potential for stock prices to rise again, especially considering positive earnings forecasts and continued interest in companies like Samsung Electronics.
Foreign selling in the Korean stock market may trigger a short-term correction. Investors should be cautious and closely monitor the situation to protect their investments.