Foreign investors are moving swiftly in the volatile KOSPI market. After recording the largest-ever monthly net selling of Korean stocks last month, they have continued their selling spree into this month.
According to the Korea Center for International Finance, foreigners net sold 19.9 trillion won ($14.8 billion) worth of KOSPI stocks last month—the largest monthly net outflow on record. They heavily offloaded shares that had driven the KOSPI's gains, including Samsung Electronics, SK Hynix, and Samsung Electronics preferred shares.
Last month saw three of the top five largest daily net selling sessions in history. The February 27 session recorded 7.1 trillion won in net selling—an all-time high—followed by the 5th (5.3 trillion won, second-largest) and 6th (3.3 trillion won, fourth-largest). By sector, the electronics and electrical industry alone saw 21.9 trillion won in net outflows. Samsung Electronics (14.6 trillion won) and SK Hynix (7.6 trillion won) accounted for a combined 22.2 trillion won in outflows.
Analysts attribute the selling to profit-taking. The Korea Center for International Finance noted that "Samsung Electronics and SK Hynix have risen 80.6% and 63.0% respectively this year, increasing incentives for profit-taking and likely triggering portfolio rebalancing to maintain target weightings."
The center added that "concerns over a slowdown in the artificial intelligence sector resurfaced following Nvidia's earnings report, while expectations for Federal Reserve monetary easing have retreated."
Foreign investors continued their selling on the 3rd of this month, net selling 5.17 trillion won and adding downward pressure on the index. This marks the second-largest daily net selling on record, following the all-time high of 7.08 trillion won on the 27th of last month. According to the Korea Exchange, the KOSPI plunged 452.22 points (7.24%) to close at 5,791.91. Samsung Electronics fell 9.88% to close at 195,100 won, while SK Hynix dropped 11.50% to 939,000 won.
Lee Kyung-min, a researcher at Daishin Securities, said, "Optimism over geopolitical developments has weakened sharply alongside a rebound in oil prices. The KOSPI extended its decline as it absorbed losses not reflected in the previous session, compounded by foreign profit-taking pressure following the recent sharp rally."