"Market Overcomes Fear of Short Selling"... Foreigners and Institutions Shift from Selling to Buying

[Image source=Yonhap News]

[Asia Economy Reporter Lee Seon-ae] The domestic stock market is shaking off fears of the resumption of short selling and showing an upward trend.

On the 10th, the KOSPI index opened at 3,201.46, up 4.26 points. As of 10:44 AM, it is recording 3,223.54, up 0.82%. The KOSDAQ index opened at 979.38, up 1.08 points. It is currently at 987.75, up 0.97%.

However, as the KOSPI index approaches its peak, investors are showing a cautious stance. While individuals showed a buying preference in the early session, they switched to a selling preference of 93.8 billion KRW in the KOSPI market, but continue to maintain a buying preference of 91.6 billion KRW in the KOSDAQ market. On the other hand, foreigners and institutions, who had shown a selling preference, switched to buying preference in the KOSPI market. They are currently net buying 69.4 billion KRW and 18.5 billion KRW respectively. In the KOSDAQ market, they continue net selling of 559.9 billion KRW and 28.2 billion KRW respectively.

Cha Hyun-gi, a researcher at Cape Investment & Securities, said, "This week’s domestic stock market can be summarized with two keywords: the possibility of a rebound in growth stocks and the continued rise of cyclical stocks," adding, "The expected weekly band for KOSPI is between 3,130 and 3,250. Factors expected to drive the rise include the possibility of a delayed tapering discussion and statements from Federal Reserve officials, while a higher-than-expected consumer price index is cited as a potential downside factor."

Heo Jae-hwan, a researcher at Eugene Investment & Securities, analyzed, "The domestic stock market was not bad last week after the resumption of short selling, with the KOSPI rising for the first time in three weeks," and added, "Stocks in cyclical sectors such as steel, banking, and transportation were strong, and the leading phase of these sectors has not yet ended."

The securities industry expects the upward trend of cyclical stocks to continue. Seo Jeong-hoon, a researcher at Samsung Securities, emphasized, "Cyclical stocks, which have recently maintained strength, are highly likely to continue leading the market," adding, "This is supported not only by the financial environment of rising interest rates but also by an unexpected revival in the manufacturing sector. Recently, sectors with sharply rising earnings forecasts include traditional cyclical stocks such as steel, metals, chemicals, and energy."