Key Is Foreign Selling... "Need to Watch Next 2 to 3 Weeks"

[Anchor]

Experts say that we need to watch the stock market for another two to three weeks to see how it will move from here. In particular, we need to closely monitor whether the trend of foreign selling of Korean stocks will stop and whether our stock market has the capacity to absorb foreign selling.

Reporting follows from Kim Beom-joo.

[Reporter]

The recent plunge in the KOSPI was largely due to domestic investors' failure to digest the stocks dumped by foreigners.

Foreigners net sold a total of 18 trillion won worth of stocks over seven trading days from October 6 to 15, while individuals and institutions net bought only about 13 trillion won, causing the KOSPI to drop by 20%.

The first half of the year was different.

Even from May 28 to June 5, foreigners dumped over 22 trillion won worth of stocks in just six days, but individuals and institutions absorbed all of that volume, keeping the KOSPI index steady.

It is not uncommon for foreign investors to withdraw money from South Korea and the semiconductor sector to invest in other countries and sectors.

However, domestically, the limit for the National Pension Service to invest in stocks is full, and individual investment capacity has also noticeably weakened.

[Kim Dong-won / Head of Research, KB Securities: Selling 3 trillion won a day back then (May and June) has a completely different intensity from selling 3 trillion won now. That is because the supply and demand (domestic buying capacity) is thin.]

Outlooks are divided.

While some analyses suggest that foreign investors could return as the earnings of Samsung Electronics and SK Hynix remain strong, other analyses clash with the view that investors, made sensitive by high interest rates and high inflation, may temporarily stay away from the stock market itself.

[Lee Jae-man / Head of Global Investment Analysis, Hana Securities: At what level of U.S. interest rates did foreigners buy South Korea? It was around 4.5%. However, with interest rates exceeding 5% now, it does not seem easy for foreigners to buy our (stocks).]

Therefore, attention is focused on what shareholder return policies Samsung Electronics and SK Hynix will present when they begin investor relations sessions starting on October 28.

Additionally, the U.S. Federal Reserve's interest rate decision on October 29 and the earnings announcements of major U.S. tech companies on October 30 are expected to be major turning points.

Until these situations are sorted out to some extent, the stock market needs to take a breather for the next two to three weeks.
※ Please note: This article was translated by AI and may contain errors.