Foreign investors have continued their selling spree for the 11th consecutive trading day. Over the last 10 trading days, more than 34 trillion won worth of stocks have been sold in the Korean securities market. Analysts view this trend not as a 'Sell Korea' phenomenon but rather as a rebalancing process to adjust the rapidly rising share of the domestic market. However, there remains potential for further selling, and the upcoming earnings season could serve as a turning point for foreign investors.
According to the Korea Exchange, foreign investors have recorded net selling for 11 straight trading days as of today. The total net selling over the past 10 trading days has reached 34.53 trillion won, with foreign investors selling an additional 2.19 trillion won today alone.
The selling trend has persisted since the beginning of the year. In the first half of 2026, foreign investors net sold 149.46 trillion won in the securities market, with a significant focus on large-cap semiconductor stocks. They sold 72.57 trillion won worth of Samsung Electronics and 57.13 trillion won worth of SK Hynix, accounting for approximately 87% of the total net selling by foreigners in the KOSPI during the first half.
Market analysts suggest that interpreting this selling trend as a sign of pessimism towards the Korean stock market is misguided. They argue that global pension funds and asset management firms are adjusting their portfolios to align with their target allocations, following the sharp rise in the Korean market.
Lee Kyung-min, a researcher at Daishin Securities, noted, "Foreign investors are primarily focusing their selling on the semiconductor sector. This is due to increased profit-taking pressure in the semiconductor industry and ongoing rebalancing as the domestic market has outperformed global markets."
Han Ji-young, a researcher at Kiwoom Securities, stated, "Foreign investors are reducing their exposure to the Korean market, particularly in semiconductors. However, it is difficult to view this as a sign of pessimism or a bet against the memory sector's peak. It is more reasonable to see it as profit-taking by active foreign funds, while the flows into passive and exchange-traded funds (ETFs) show a different trend."
Some analysts believe it is premature to conclude that rebalancing is complete. There is still a possibility of additional profit-taking, particularly in high-ownership stocks like Samsung Electronics and SK Hynix. Today, foreign investors sold 1.76 trillion won worth of SK Hynix and 386 billion won worth of Samsung Electronics, continuing the trend of selling focused on semiconductor stocks.
Moon Da-un, a researcher at Korea Investment & Securities, remarked, "It is unlikely that we will see a shift to net buying by foreign investors in the second half of the year. This is an inevitable reaction to the rapid rise in the KOSPI. However, the scale of net selling may decrease in the fourth quarter as the KOSPI's upward momentum slows."
Nevertheless, there are expectations that the earnings season could be a crucial factor in determining foreign investment flows. Starting with Samsung Electronics' earnings announcement on July 7, the results from major companies like SK Hynix will follow, making performance and outlook for the second half key variables influencing foreign investment trends. Seo Sang-young, a researcher at Mirae Asset Securities, stated, "The outcomes will determine whether the positive momentum in the semiconductor sector continues."
* This article has been translated by AI.
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