Foreigners buy for four days straight: Is 'Sell Korea' over? KOSPI recovers 7,000 points intraday

The South Korean stock market, KOSPI, has shown a consistent upward trend this week, fueled by a significant buying spree from foreign investors. This sustained buying, marking four consecutive days of net purchases, has led to market speculation that the "Sell Korea" sentiment might be over. On Thursday, the KOSPI closed 2.42% higher at 6977.94, briefly surpassing the 7,000-point mark in early trading. While the index couldn't maintain this level to close above 7,000, it has experienced a steady rise throughout the week, gaining approximately 11.5% over five trading days since a rebound began on October 10th.

Foreign investors have been the primary drivers of this rally. Excluding a net sale of 1.5 trillion won on October 10th, they recorded net purchases on the other four days, totaling 8 trillion won from October 11th to 14th. This level of sustained buying intensity is noted as the highest this year, following a period of significant net sales in previous months. The inflow of foreign capital has been gradually observed since late last month, with October marking the first month of net purchases (600 billion won) since April.

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The strong foreign inflow confirmed today once again as the driving force behind the KOSPI's rebound.

The bulk of foreign investment this week targeted large-cap semiconductor stocks, with Samsung Electronics and SK Hynix seeing net purchases of 3.3 trillion won and 2.9 trillion won, respectively. Both companies continued their upward trajectory, closing higher on Thursday. Analysts attribute this influx to easing US inflation concerns and expectations of increased investment in AI infrastructure, highlighting strong foreign demand as the key catalyst for the KOSPI's rebound.

However, unlike the rapid surge in the first half of the year driven solely by semiconductor giants, the current rally is characterized by broader sector participation. On Thursday, 677 stocks on the KOSPI rose, with sectors like telecommunications, automobiles, and oil supporting the index. Hyundai Motor and Hyundai Mobis saw significant gains, outperforming semiconductor stocks, while LG Electronics, Samsung SDI, Hanwha Ocean, and SK Innovation also experienced substantial increases. SK Telecom surged by over 10%. The KOSDAQ index also continued its upward trend this week, closing 0.38% higher on Thursday, indicating a broader market sentiment shift towards risk appetite driven by relief over corporate earnings and inflation data.

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The trend of KOSPI strengthening and KOSDAQ showing stable gains continues. This signals an expansion of risk appetite due to relief over both earnings and inflation.