Retail investors who were the “lone buyers” turn to selling as the market rebounds, offloading more than 1 trillion won in KOSPI stocks

[Financial News] South Korea’s stock market managed to rebound after opening sharply lower, but individual investors are instead selling off large volumes of shares. Individuals who had supported the market by absorbing shares sold by foreign investors and institutions during the previous sharp downturn turned net sellers on the day the index rebounded.
While foreign investors and institutions moved in to buy the dip, individuals net sold more than 1 trillion won worth of shares on the KOSPI alone. The flow of funds is the opposite of what was seen during the sharp downturn, when individuals were the buyers, drawing attention to a possible shift in investor sentiment.
According to the Korea Exchange, as of 2:45 p.m. on the 19th, individuals had net sold 1.8189 trillion won on the main board. By contrast, foreign investors net bought 443.5 billion won and institutions net bought 964 billion won. Their combined net purchases amounted to 1.4075 trillion won, absorbing a substantial portion of individuals’ net sales.
The KOSPI opened sharply lower that day but turned higher in the afternoon. Selling gathered early in the session amid concerns that the shock from last week’s sharp downturn could continue, but the index later rebounded as buying by foreign investors and institutions came in.
Strength in some sectors, including large-cap semiconductor stocks, pharmaceuticals and biotech, and secondary batteries, helped support the index’s recovery.
What stands out in particular is the direction of individuals’ trading. During the sharp downturn, they treated falling share prices as an opportunity to buy at lower prices and showed buying interest. But as the market rebounds, they are net selling large volumes of KOSPI stocks. This may suggest that investor sentiment has not recovered as quickly as the index, despite its rebound.
Investors who bought shares during the sharp downturn may be wary of further declines or may be seeking to reduce their risk exposure in a more volatile market.
Of course, it is difficult to interpret all of individuals’ net selling as stop-loss selling. A combination of factors may be at play, including taking profits on holdings after their rebound, reducing the burden of margin trading, and adjusting portfolios.
Still, the fact that individuals recorded large net sales while the index was rising, as foreign investors and institutions both made net purchases, shows that the market’s main trading participants have been changing since the sharp downturn.
A different pattern emerged on the KOSDAQ. At the same time, individuals net bought 60.8 billion won, and institutions also net bought 22.5 billion won. Foreign investors net sold 92.9 billion won.
Given that individuals were net sellers on the KOSPI but net buyers on the KOSDAQ, it is difficult to say that individual investors are leaving domestic stocks across the board. They may be pursuing different trading strategies depending on the market and the stocks involved.
The key question going forward is whether buying by foreign investors and institutions will continue. Further flows will be important in determining whether the dip-buying seen after the sharp downturn amounts to only a short-term rebound or leads to a sustained recovery.
A securities industry official added, “It is difficult to conclude, based on a single day’s trading flows, that individuals have engaged in panic selling or that buying by foreign investors and institutions marks a trend reversal. Whether foreign buying continues and whether the rebound spreads, particularly among large-cap stocks such as semiconductor shares, will be important factors.”

[email protected] Kang Jung-mo Reporter