Korean stocks fell sharply during the week of July 6-10, with the KOSPI closing at 7475.94, down 7.57%, according to Korea Exchange data released July 12. Foreigners net sold 4.3409 trillion won, while individuals and institutions net bought 3.2691 trillion won and 832.5 billion won respectively. The KOSPI dropped from its all-time high of 9385.59 to the 7200 range, reaching historically low valuation levels that analysts say could enable a rapid reversal despite semiconductor-driven volatility.
Foreign Selling Drives KOSPI Decline
Foreign investors led the KOSPI's decline by net selling 4.3409 trillion won during the week of July 6-10, according to Korea Exchange data. Individual investors countered with net purchases of 3.2691 trillion won, while institutional investors added 832.5 billion won in net buying. The index closed the week at 7475.94, marking a 7.57% drop from the prior week.
Analysts See Potential for Rapid Reversal at Historical Lows
Lee Kyung-min, a researcher at Daishin Securities, stated that the KOSPI fell from its all-time high of 9385.59 to the 7200 range during the week. Lee noted that the KOSPI is currently positioned at historically low valuation levels and has fallen below key support lines, adding that while a trend reversal may require time, the index is at a level where a rapid turnaround is possible even with minor positive catalysts.
Na Jung-hwan, a researcher at NH Investment & Securities, characterized the current market as one where declines trigger selling and investors selectively accept only negative factors due to confirmation bias. Na stated that the current correction is closer to a pre-reflection of concerns about earnings growth rate and capital expenditure slowdown rather than fundamental deterioration, describing the situation as closer to a simple sell-off phase with stock prices approaching bottom levels.
US CPI Release Scheduled for July 14
The US June Consumer Price Index is scheduled for release on July 14 (local time). Securities firms expect that if inflation pressures ease to around 3.92% — the forecast from the Cleveland Federal Reserve's inflation prediction model — it could serve as a trigger for market stabilization.
BOK Rate Decision Set for July 15
The Bank of Korea's Monetary Policy Committee is scheduled to decide on interest rates on July 15. Experts expect the BOK to raise rates for the first time since January 2023, marking the first rate hike in approximately three years.
Q2 Earnings Season Begins
Global companies' second-quarter earnings announcements are scheduled to begin, starting with major US bank stocks, followed by ASML, TSMC, and Netflix. Kang Jin-hyuk, a researcher at Shinhan Investment & Securities, noted that Samsung Electronics recorded a profit surprise significantly exceeding market expectations, but sell-offs emerged due to semiconductor peak-out debates. Kang stated that confirmation of earnings announcements and guidance from US big tech and semiconductor supply chain companies this week will be key to determining whether market doubts and fear regarding the sustainability of artificial intelligence investment can be calmed.
FAQ
What caused the KOSPI to fall 7.57% during the week of July 6-10?
Foreign investors drove the decline by net selling 4.3409 trillion won in the KOSPI market during the week of July 6-10, according to Korea Exchange data released July 12. The index closed at 7475.94, down from its all-time high of 9385.59.
Why do analysts see potential for a rapid reversal in Korean stocks?
Lee Kyung-min of Daishin Securities stated that the KOSPI is currently positioned at historically low valuation levels and has fallen below key support lines, noting that the index is at a level where a rapid turnaround is possible even with minor positive catalysts despite ongoing semiconductor-driven volatility.
What key events are scheduled for the week of July 14-15?
The US June Consumer Price Index is scheduled for release on July 14 (local time), and the Bank of Korea's Monetary Policy Committee is scheduled to decide on interest rates on July 15, with experts expecting the BOK's first rate hike since January 2023.
