As the KOSPI index faced significant fluctuations, it dropped below 110 trillion won in investor deposit funds for the first time in five months. This decline suggests that retail investors, who had been supporting the index amid heavy foreign selling, are running out of capital.
According to the Korea Financial Investment Association, as of July 9, the total investor deposit funds stood at 107.1279 trillion won. This marks a decrease for eight consecutive trading days since reaching 132.4697 trillion won on June 29, the lowest level since February 20.
After hitting a record high of 9,114.55 on June 22, the KOSPI plummeted to 7,063.76 during trading, prompting retail investors to inject funds for bargain buying or withdraw money from the market.
In July, foreign investors sold a net 12.3246 trillion won in the stock market, while retail investors bought a net 9.3669 trillion won, helping to support the index's lower levels.
However, retail investors have shifted to selling for three consecutive days since July 8, indicating that their buying power may have reached its limit.
Kim Yong-gu, a researcher at Yuanta Securities, stated, "While retail investors are supporting the market, considering the Bank of Korea's interest rate hikes, government loan regulations, and the decline in deposit funds, their capacity for unlimited net buying cannot be sustained."
Meanwhile, the balance of margin trading, which allows investors to borrow money from brokerages for stock purchases, has also decreased to 36.6336 trillion won, reflecting a decline in investor sentiment.
* This article has been translated by AI.
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