Foreigners Become 'Lions' in 6 Weeks... SK Hynix Most Purchased

[Asia Economy Reporter Song Hwajeong] Foreign investors have returned to a buying trend in the domestic stock market after six weeks.

According to the Korea Exchange on the 18th, foreign investors net purchased about 246.1 billion KRW in the domestic stock market during the week from the 12th to the 16th. Foreign investors bought 36.4 billion KRW in the KOSPI market and 209.9 billion KRW in the KOSDAQ market, respectively.

The stock most purchased by foreign investors last week was SK Hynix. Foreign investors net bought SK Hynix for 137.8 billion KRW last week. This was followed by L&F with a net purchase of 121.1 billion KRW. Other stocks net purchased included SK IE Technology (119.0 billion KRW), Samsung Biologics (70.3 billion KRW), Solus Advanced Materials (58.9 billion KRW), Korea Financial Group (58.5 billion KRW), POSCO (562 billion KRW), Naver (486 billion KRW), Lotte Chemical (43.9 billion KRW), and Kakao Games (33.3 billion KRW).

The stock most sold by foreign investors last week was HMM. Foreign investors net sold HMM for 169.8 billion KRW last week. This was followed by Kakao, which was sold for 158.0 billion KRW. Other stocks in the top net sales by foreign investors included Hanssem (82.3 billion KRW), Hyundai Motor (62.0 billion KRW), Doosan Heavy Industries & Construction (61.2 billion KRW), LG Chem (51.6 billion KRW), KB Financial Group (39.7 billion KRW), Daehan Petrochemical (38.5 billion KRW), Shinhan Financial Group (34.9 billion KRW), and SD Biosensor (33.9 billion KRW).

It is analyzed that the favorable global liquidity environment will have a positive impact on foreign investors' movements. According to KTB Investment & Securities, Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), in his semiannual monetary policy congressional testimony, assessed that the higher-than-expected inflation environment could last longer than anticipated but maintained the existing judgment that it would be temporary. Accordingly, despite the U.S. consumer price index rising 5.4% in June, exceeding expectations and reaching a new high, market concerns were restrained. Park Seokhyun, a researcher at KTB Investment & Securities, said, "Chairman Powell confirmed the need to verify further recovery in the labor market before deciding on tapering (asset purchase reduction), which means that the market's concern about a hasty change in Fed's stance is excluded for the time being," adding, "In terms of market impact, this supports the continued stable flow of the lowered Treasury yield level."

The European Central Bank (ECB) also shows the same situational awareness as the Fed. Although the Eurozone consumer price inflation rate approached 2%, the policy target, which had been slightly below 2%, was fixed at 2%, and it was made clear that it would not be affected by temporary price increases. Researcher Park explained, "The confirmation that the existing monetary policy stance of the two major central banks in advanced countries remains unchanged indicates that the favorable global liquidity environment is being extended." He added, "The combination of a favorable global liquidity environment and low Treasury yields can positively influence IT stock returns and foreign investor trends in emerging stock markets, which will be a driving force leading to further attempts to reach new highs in the KOSPI."