[MarketING] Will the Spring Breeze Brought by Foreigners Continue the KOSPI Uptrend?

Foreign Buying Drives KOSPI Above 2600 Again
Attention on Whether Strong Momentum Will Continue This Week

The KOSPI continued its upward trend by recovering the 2600 level, drawing attention to whether this strong momentum will persist this week (March 24-28). As foreign buying revived, driving the KOSPI back above 2600 and Samsung Electronics to the 60,000 KRW level, the continuation of foreign buying will likely be crucial for further KOSPI gains.

Last week, the KOSPI rose by 2.99%, while the KOSDAQ fell by 2.02%. Kang Jin-hyuk, a researcher at Shinhan Investment Corp., explained, "As the uncertainties weighing on market sentiment eased, the KOSPI settled above 2600. The tariff noise from U.S. President Donald Trump diminished, shutdown concerns were resolved over the weekend, and at the Federal Open Market Committee (FOMC), Federal Reserve Chairman Jerome Powell presented an optimistic outlook on the economy, calming the market. Additionally, strong U.S. retail sales data for February contributed to easing economic concerns."

The divergent movements of leading stocks caused the KOSPI and KOSDAQ to perform differently. Kang analyzed, "Foreign capital flowed into the semiconductor sector due to expectations for GTC 2025 and a rebound in memory prices, with Samsung Electronics returning to the 60,000 KRW level for the first time in five months. Meanwhile, Alteogen surged on news of a license agreement for ALT-B4 with AstraZeneca’s subsidiary but gave up all gains after profit-taking and absorption of semiconductor supply and demand."

With foreign buying continuing, expectations for a foreign investor comeback are growing. Last week, foreigners maintained net purchases throughout the week in the KOSPI market. They also continued net buying of Samsung Electronics during the same period. Foreign investors purchased Samsung Electronics the most, with net buying of 1.9778 trillion KRW last week. This indicates a shift in the trading pattern of foreigners, who had previously maintained a selling stance on Samsung Electronics. Kim Jong-min, a researcher at Samsung Securities, said, "Ahead of the full resumption of short selling at the end of March, the main players in supply and demand are changing. Since the beginning of the year, institutional investors have been the primary drivers of the Korean stock market’s rise, but since mid-March, a significant increase in foreign net buying has been observed. The flow of global funds, which was unilaterally focused on the U.S. last year, is now diversifying to Asia and Europe." He added, "Moreover, the valuation and exchange rate of the Korean market remain at historically low levels, highlighting the price attractiveness of large-cap stocks with high market capitalization."

There are also risk factors to watch. These include tariff risks, which were quiet last week, and the resolution of domestic political uncertainties. Lee Sang-jun, a researcher at NH Investment & Securities, said, "With the mutual tariff imposition just a week away, the risk of Trump tariffs could rise again. However, as seen in recent interviews with U.S. Treasury Secretary Scott Baesert, the purpose of tariffs is ultimately to gain leverage in negotiations. After the peak of tariff concerns passes, positive factors such as U.S. tax cuts and the resolution of political uncertainties in Korea are expected to support stock prices. If stock prices adjust due to tariff concerns, it is advisable to approach from a buying perspective." NH Investment & Securities projected the KOSPI range for this week to be between 2540 and 2680.

Key events this week include the release of the U.S. March S&P Global Manufacturing and Services Purchasing Managers’ Index (PMI) on the 24th, the U.S. March Conference Board Consumer Confidence Index on the 25th, and U.S. February Durable Goods Orders on the 26th. On the 27th, the final U.S. GDP figure for Q4 of last year will be announced, followed by the U.S. February Personal Consumption Expenditures (PCE) Price Index on the 28th.

Lee Kyung-min, a researcher at Daishin Securities, noted, "Attention should be paid to the U.S. Consumer Confidence Index released on the 25th, which in February had raised recession concerns. The focus is on whether the survey shows an increase in expected inflation and the proportion of respondents anticipating economic deterioration. The consensus (average forecast by securities firms) expects a further decline to 94 from 98.3 last month. However, Chairman Powell has alleviated market anxiety regarding the survey, and with stabilization of temporary factors such as egg prices and digestion of tariff uncertainties, the confidence index may respond positively after confirming the easing of uncertainties."