Foreign Investors Sell 14 Trillion Won While Institutions Buy 8 Trillion Won: Divergent Flows in KOSPI Market
Financial News
March 1, 2026 | By Han-gul Bae
Seoul – The KOSPI market is currently experiencing a notable divergence in investment flows between foreign investors and domestic institutions. While foreign investors have engaged in large-scale selling amounting to approximately 14.4 trillion Korean won over a short period, institutions and individual investors have taken the opposite stance by accumulating shares, leading to a tug-of-war in market supply and demand.
According to data from the Korea Exchange, from February 13 through 27, foreign investors registered net sales for eight consecutive trading days, unloading a total of 14.4 trillion won worth of KOSPI shares. In stark contrast, institutional investors net purchased 8.3 trillion won during the same period, maintaining a consistent buying trend except for one day (February 23). Individual investors also contributed positively with net purchases totaling 4.7 trillion won. This opposing investment behavior has created a market environment where foreign selling pressure is largely offset by domestic buying.
The divergence is most evident among large-cap stocks, particularly within the semiconductor sector. Samsung Electronics was the top target for institutional investors, who poured in 2.9 trillion won, followed by SK Hynix with 1.3 trillion won. Other notable purchases included Doosan Robotics, Hyundai Motor, and Samsung Electronics’ preferred shares. Conversely, foreign investors’ largest sales were focused on Samsung Electronics, recording sales near 13 trillion won, along with sizable disposals in SK Hynix and Samsung Electronics’ preferred shares.
Individual investors also concentrated their purchasing on major semiconductor stocks, with Samsung Electronics remaining a favorite as they acquired shares worth nearly 8.6 trillion won, and added 1.2 trillion won in SK Hynix shares. This dynamic effectively reflects a scenario where foreign investors are liquidating holdings that are being absorbed by institutional and retail investors domestically.
Despite sizable foreign selling, leading semiconductor stocks have shown strong upward momentum. Samsung Electronics shares surged approximately 40% from early February to the end of the month, while SK Hynix rose by around 20% during the same timeframe. This trend suggests that institutional and individual investors’ buying interests have been instrumental in supporting and propelling these stock gains.
Market analysts attribute the foreign selling to several external factors: increased volatility in U.S. technology stocks, a weakening appetite for riskier assets driven by rising exchange rates, and rebalancing of global exchange-traded funds (ETFs). The semiconductor sector has been a prime target for profit-taking in global equity markets, particularly among highly liquid large-cap names. However, this selling pressure is not believed to stem from deteriorating industry fundamentals or a shift in medium-term earnings outlooks.
On the other hand, institutional investors are selectively increasing their holdings in large-cap KOSPI stocks based on solid earnings performance and valuations. Analysts note that ongoing upward revisions in earnings estimates and relatively restrained valuation levels underpin this expansion of positions, even amid recent index gains. Furthermore, inflows of passive funds and ETFs dominated by large-cap shares are helping stabilize market liquidity, boosted by individual investor participation.
Looking ahead, brokerage firms expect that the supply-demand standoff between foreign and institutional players is likely to persist in the near term. Short-term volatility driven by global uncertainties is anticipated; however, current market conditions are not regarded as threatening to the overall upward trend.
Kim Min-kyu, a researcher at KB Securities, commented, “The semiconductor sector retains medium- to long-term upside potential. Nevertheless, within a bullish market environment, amplified volatility and sharp corrections may intermittently occur. The KOSPI’s price-to-book ratio at two times may act as a short-term resistance, but strengthened earnings trends relative to the past could justify surpassing previous highs.”
Overall, the KOSPI is navigating through a phase of contrasting investor behaviors, with foreign investors reducing their positions while domestic institutions and individuals continue to accumulate shares. This dynamic is shaping a complex but resilient market landscape.
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