Foreign investors recorded a historic level of selling in the KOSPI during the first half of this year, net selling over 148 trillion won worth of shares.

Foreign ownership rates in Samsung Electronics and SK Hynix have fallen to levels lower than those seen during the global financial crisis.

Analysts attribute this trend to a combination of profit-taking and the rise in the won-dollar exchange rate, projecting that selling pressure from foreign investors may persist in the second half of the year if the dollar remains strong.

According to the Korea Exchange, foreign investors sold 148.316 trillion won worth of stocks in the KOSPI market during the first half of this year.

This stands in contrast to the same period, during which individual and institutional investors were net buyers, purchasing 99.174 trillion won and 35.045 trillion won worth of stocks, respectively.

Notably, on June 29, foreign investors net sold 7.756 trillion won worth of stocks in a single day.

This marks the largest daily volume since data collection began in 1998.

The selling by foreign investors was concentrated on large-cap semiconductor stocks, with 3.8 trillion won worth of Samsung Electronics and 3.2 trillion won worth of SK Hynix sold off.

Combined, these two stocks account for 92% of the total net selling by foreign investors in the KOSPI.

Foreign ownership rates for the two semiconductor giants, Samsung Electronics and SK Hynix, have also dropped to record lows.

These levels are lower than those recorded during the past global financial crisis and the COVID-19 pandemic.

All of the top 20 largest daily net selling records by foreign investors in the KOSPI occurred this year, with new records being set every month since May.

Analysts suggest that the backdrop for this foreign selling includes profit-taking following the sharp rise in domestic stock prices and rebalancing pressure to meet target allocation ratios for domestic holdings.

They also diagnosed that the significant rise in the won-dollar exchange rate has stimulated the selling trend among foreign investors.

When the exchange rate rises, the value of the won falls, leading foreign investors to sell domestic stocks to avoid currency exchange losses.

Foreign investors net sold 92.89 trillion won worth of stocks over the two months since May, when the exchange rate began to rise in earnest.

During this period, the exchange rate rose by 66.1 won, from 1,483.3 won to 1,549.4 won, based on the closing price of intraday trading.

Securities firms expect the foreign selling trend to continue into the second half of the year.

This is because the KOSPI is expected to continue rising despite market volatility, while the dollar is also projected to remain strong for the time being.

Some view this as an inevitable reaction occurring during the process of the KOSPI's sharp ascent.

Reported by Kim Minjeong | Video by Ahn Jun-hyeok | Graphics by Yook Do-hyun | Produced by SBS Digital News