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View of the Korea Exchange. (Photo = Korea Exchange) |
[Alpha Biz= Reporter Kim Sangjin] Foreign investors have aggressively sold Korean stocks in the second half of this year, with the total amount surpassing levels seen during the 2008 global financial crisis.
According to the Korea Exchange, foreign investors sold off 18.1 trillion KRW worth of shares in the KOSPI market, a figure larger than the 15.99 trillion KRW sold during the financial crisis. This marks the highest foreign sell-off in the second half since 2007.
The sell-off is attributed to several factors:
Economic Slowdown: Despite unexpected interest rate cuts, concerns over an economic recession have intensified.
US Trade Policies: Fears of a continued tough stance on trade by the second term of the Trump administration.
End of Yen Carry Trade: There are also concerns regarding the unwinding of the yen carry trade, where investors borrow in low-interest yen to invest in higher-yielding assets.
As a result, the market has seen continued volatility, with both the KOSPI and KOSDAQ indexes dropping sharply. On November 29, the KOSPI fell by 1.95% to close at 2,455.91, dipping below the 2,500-point mark for the first time in six sessions. The KOSDAQ also dropped 2.33%, closing at 678.19.
Experts suggest that, given the current market conditions, market stabilization measures, such as the Securities Market Stabilization Fund, are needed to address the deteriorating investor sentiment and market stability. If the strong dollar trend continues, foreign selling may persist, especially in December.
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
