Korean Stock Market Soars Again, Foreign Investors Sell Frenetically as Retail Investors Hold Firm

The KOSPI index this week precisely landed on the 21-day moving average and the short-term trend line before once again sharply rising vertically, with a single-day increase of 8.4%. The Market Ear points out that this round of market movement exhibits the typical characteristics of “spot price rise, volatility rises” in an uptrend panic, with implied volatility approaching the high point in March.

It is worth noting that despite the extreme increase, the technical indicators did not show severe overbought conditions. The brief sell-off beforehand substantially cooled down the RSI for KOSPI, SK Hynix, and Samsung Electronics, creating room for a new round of surge. Goldman Sachs analyst Christy Park has calculated that out of over 30 trading days since April, SK Hynix only experienced 5 instances of回调s with a drop exceeding 1%, and each time fully recovered within 1 to 3 trading days.

The division in capital dynamics is equally noteworthy. During the KOSPI's 6% drop last week, foreign capital net sold approximately 20 trillion won, with SK Hynix and Samsung Electronics being the main focus; individual Korean investors almost entirely absorbed all the selling. Foreign capital's cumulative net selling for the year has reached 82 trillion won, yet the index continues to rise.

Goldman Sachs maintains its bullish judgment on the South Korean stock market, with three core reasons: nearly 70% of South Korean stocks are still below their book value; foreign holdings in South Korea and the semiconductor sector are still low; Interactive Brokers opened the South Korean market to global individual investors in May, and potential incremental capital has yet to fully enter the market.