Foreign inflows surge, semiconductor stocks lead gains amid volatility concerns

Investors' interest is intensifying ahead of the Kospi reaching 4,000, with attention also focused on future market trends.

According to the Korea Exchange on the 26th, the average daily transaction value on the Kospi this month was 16.653 trillion Korean won, a 44% increase from the previous month. This marks the highest level in four years and four months since June 2021, during the stock market boom caused by the COVID-19 pandemic.

Fund inflows into the heated market remain active. Investor deposits, which serve as standby funds for the stock market, exceeded 80 trillion Korean won for the first time on the 13th and reached a record high of 80.6257 trillion Korean won on the 20th.

Foreign investors' net buying momentum is also strong. As of the 24th, foreign investors' holdings in the securities market amounted to 1,125 trillion Korean won, nearly five times the figure at the end of last year (632 trillion Korean won). The foreign ownership ratio in the securities market recently reached 34.7%.

By investment category, the concentration in large-cap stocks persists. Approximately one-third of Kospi transactions this month were concentrated in large semiconductor stocks such as Samsung Electronics and SK Hynix. Analysts attribute the buying momentum to expectations of strong earnings amid the "semiconductor super cycle." In fact, the average daily transaction value of these three stocks (Samsung Electronics, SK Hynix, and Samsung Electronics preferred shares) this month was 4.599 trillion Korean won, accounting for 28% of the total transaction value. Lee Jun-seok, a researcher at Hanyang Securities, said, "Despite the overall market boom, transaction volumes are highly concentrated in the Kospi market, particularly in a few large-cap stocks."

Securities firms view the Kospi as having sufficient room for further gains due to expectations of U.S. interest rate cuts and strong third-quarter earnings. Hwang Jun-ho, a researcher at Sangsangin Investment & Securities, said, "The possibility of a rate cut at the FOMC meeting is high, and earnings expectations centered on big tech will strengthen the upward trend."

However, uncertainties such as profit-taking pressure from short-term surges exist. Na Jung-hwan, a researcher at NH Investment & Securities, said, "Amid the Kospi's short-term surge, there is a trend of using profit-taking as a pretext due to uncertainties in Korea-U.S. tariffs." Park Suk-hyun, a researcher at Woori Bank's Investment Product Strategy Division, added, "While the semiconductor sector's strength is not a bubble given the upward revision of earnings forecasts, caution is needed regarding potential side effects from the rapid short-term rise."

Kospi Nears 4,000 Amid Investor Surge