Foreign investors experienced unprecedented net selling of domestic stocks worth approximately 20 trillion won in February, but it was assessed as not significant when compared to the overall market capitalization.
In February, foreign investors marked a historical peak in net selling of South Korean domestic stocks, amounting to around 20 trillion won, which is the highest ever recorded. The International Financial Center reported that this figure, while alarming in monetary terms, positioned itself relatively lower in terms of market capitalization impact, ranking between 10th and 100th based on daily trading volumes. Specific days saw immense sell-offs, with net sales reaching 7.1 trillion won on February 27, echoing significant market fluctuations but not translating to a drastic change in overall market capital.
Despite the dramatic absolute numbers, analysts noted that foreign investors' selling was only modest compared to the total market cap. On days where net sales were among the highest, the percentages of market capitalization represented were minuscule, marking only 0.13% on February 27 and similarly low figures for other significant sell-off days. These statistics are framed in context of a broader trend observed in the stock market, where notable shifts occur yet signal a degree of resilience in overall market performance.
Furthermore, between the beginning of the year and the end of February, foreign investors cumulatively sold about 19.3 trillion won worth of domestic stocks, driven by various factors including profit-taking from soaring stock prices, concerns over artificial intelligence profitability, and a retreat from expectations for US interest rate cuts. Contrastingly, there is a beneficial takeaway as foreign investments into domestic bonds continued, amounting to 8.0 trillion won in net purchases for February alone, indicating a diversified investment strategy among foreign portfolios amidst the volatile stock scenario.
