Foreign investors net purchased approximately 6.2 trillion won in the Korean stock market (KOSPI) over four consecutive trading days from the 20th to the 23rd, marking a sharp reversal from massive sell-offs earlier in July. The buying surge intensified around Alphabet's earnings announcement, with nearly 5 trillion won flowing into Korean stocks over two days on the 22nd and 23rd. This shift follows a period from late June to early July when foreign investors dumped nearly 20 trillion won worth of Korean stocks amid concerns over AI investment slowdown and a weakening won. The turnaround was driven by Alphabet's second-quarter results confirming continued AI infrastructure investment and better-than-expected cloud revenue growth, alongside stabilization of the won-dollar exchange rate from the 1500 level to the 1400 range. The investment community is now watching whether this marks a sustained return of foreign capital to Korean stocks, particularly semiconductor large-caps like Samsung Electronics and SK Hynix.
Foreign Investors Net Purchase 6.2 Trillion Won Over Four Trading Days
According to the Korea Exchange on the 24th, foreign investors continued buying for four consecutive trading days from the 20th to the 23rd, net purchasing approximately 6.2 trillion won in the KOSPI market. However, early in trading on the 24th, foreign investors net sold around 420 billion won as of 9:20 AM due to Middle East uncertainties.
The buying intensity expanded significantly around the U.S. Alphabet (Google) earnings announcement. Foreign investors net purchased approximately 2.6 trillion won on the 22nd and approximately 2.2 trillion won on the 23rd, injecting nearly 5 trillion won into the domestic stock market in just two days. This contrasts sharply with the "Sell Korea" stance from late last month to early this month, when they dumped nearly 20 trillion won.
The change in foreign investor supply aligns with trends over recent weeks. Foreign investors, who recorded approximately 20 trillion won in net sales from late June through the first week of July, reduced their net selling to around 4 trillion won in the second week, then turned to net buying of approximately 200 billion won in the third week. This week, they continued buying at a scale of several trillion won per day, raising the possibility of a full-scale return.
Alphabet Earnings Confirm Continued AI Investment Expansion
The biggest factor behind the recovery in foreign investor sentiment is the easing of concerns about AI investment. Previously, the market saw widespread concerns that a slowdown in AI investment by U.S. Big Tech companies would also dampen memory semiconductor demand, leading to significant corrections in domestic semiconductor stocks centered on Samsung Electronics and SK Hynix.
However, Alphabet recorded cloud revenue growth that exceeded market expectations in its second-quarter earnings announcement and reconfirmed its policy to maintain an expanded AI infrastructure investment stance. With confirmation that cloud business profitability is improving despite large-scale capital expenditures (Capex), market assessments suggest that concerns over "AI investment peak-out" have somewhat eased.
Lee Jae-won, a researcher at Yuanta Securities, analyzed that "Alphabet's strong performance and upward Capex guidance confirmed that AI investment expansion and profitability improvement are simultaneously possible" and "reconfirmed that July's semiconductor plunge was more about leverage liquidation than demand collapse."
On the previous day, foreign investors net purchased approximately 1.3 trillion won of SK Hynix and approximately 350 billion won of Samsung Electronics, placing them first and second in net purchases respectively. About half of the total foreign net purchase amount was concentrated in these two stocks.
Won-Dollar Exchange Rate Stabilizes to 1400 Range
The exchange rate conditions that pressured foreign investor supply are also improving. Recently, the exchange rate has come down from levels exceeding 1500 won to the 1400 won range, partially reflecting expectations for a base rate cut. When the exchange rate stabilizes in a downward trend, foreign investors can expect not only stock price increases but also exchange rate gains, making investment in the domestic stock market more attractive.
Analysts Cite Valuation and Improved Conditions for Market Recovery
The securities industry views foreign investor supply as a key variable for a third-quarter rebound, as the KOSPI bottom has been largely confirmed. The earnings and AI investment plans of other hyperscalers such as Microsoft (MS), Meta, and Amazon scheduled for next week, along with the U.S. Federal Open Market Committee (FOMC) results, are cited as key variables determining whether foreign buying will continue.
Researcher Lee Jae-won explained that "despite Middle East geopolitical conflicts, meaningful net purchases by foreigners continue after entering an overwhelmingly cheap valuation range" and "both the inflation indicators (stabilization of rate cut probability) and hyperscaler earnings and Capex guidance, which we considered most important as drivers for the July market rebound, passed safely."
FAQ
What did foreign investors do in the Korean stock market from the 20th to the 23rd?
Foreign investors net purchased approximately 6.2 trillion won in the KOSPI market over four consecutive trading days from the 20th to the 23rd. The buying surge was particularly strong around Alphabet's earnings announcement, with nearly 5 trillion won purchased over two days on the 22nd and 23rd.
Why did foreign investor sentiment toward Korean stocks improve?
The recovery was driven by two main factors: Alphabet's second-quarter earnings confirmed continued AI infrastructure investment expansion and better-than-expected cloud revenue growth, easing concerns about AI investment slowdown. Additionally, the won-dollar exchange rate stabilized from the 1500 level to the 1400 range, making Korean stock investments more attractive to foreign investors.
Which Korean stocks received the most foreign investment on the 23rd?
On the 23rd, foreign investors net purchased approximately 1.3 trillion won of SK Hynix and approximately 350 billion won of Samsung Electronics, placing them first and second in net purchases respectively. About half of the total foreign net purchase amount was concentrated in these two semiconductor stocks.
