[Asia Economy Reporter Ji Yeon-jin] Foreign investors, who had continued a seven-week consecutive net selling rally in the domestic stock market, switched to net buying last week.
According to the Korea Exchange on the 22nd, foreign investors net purchased stocks worth approximately 442 billion KRW in the domestic stock market from the 16th to the 20th. They net bought 352.3 billion KRW in the KOSPI market and 89.7 billion KRW in the KOSDAQ market.
During this period, the stock most purchased by foreign investors was L&F, a secondary battery parts company listed on KOSDAQ, with 186.8 billion KRW. This was followed by LG Energy Solution (140.2 billion KRW), Hwasung (133.2 billion KRW), Woori Financial Group (105.9 billion KRW), and Kia (87.9 billion KRW).
On the other hand, JB Financial Group was the most sold stock, with net sales of 249.3 billion KRW. Amorepacific (-83.7 billion KRW), LG Electronics (-66.7 billion KRW), LG Household & Health Care (-54.2 billion KRW), and SM Entertainment (-38.4 billion KRW) also saw large net sales.
Foreign investors had been net sellers of domestic stocks for seven consecutive weeks from the end of March until the 13th. The prolonged Russia-Ukraine war caused ongoing raw material supply shortages, worsening inflation. As the U.S. implemented sharp interest rate hikes, the dollar's value surged rapidly. Concerns about stagflation, where high inflation and economic recession occur simultaneously, spread, intensifying foreign investors' selling of Korean stocks since the beginning of the year.
However, with signals indicating the peak of the strong dollar that had fueled foreign selling, the 'sell-off' trend appears to have paused. Shin Seung-jin, a researcher at Samsung Securities, explained, "Due to prolonged inflation concerns caused by interest rate hikes and geopolitical issues, foreign investors' continued selling weakened the Korean won to around the critical level of 1,300 KRW per USD, making the Korean stock market's price attractiveness stand out. The dollar index, a barometer of risk asset avoidance, has recently shown signs of decline. As a result, the sustained selling by foreign investors has eased since last week."
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