Korean retail investors buy $1.6 billion as KOSPI falls

Korean retail investors bought $1.6 billion in stocks on Monday, taking the opposite side of foreign investors and institutions that were selling. The KOSPI fell 2.70% on Sept. 28 and closed at 6,889.75. Markets had reopened after the Chuseok holiday. Foreign investors sold 3.23 trillion won ($2.4 billion). Foreign investors cited a stronger US dollar and short-term doubts about Korea's semiconductor sector. Institutions joined the selling. Financial investment firms, investment trusts and pension funds led the institutional selling. Retail investors were the KOSPI's only net buyers that day. Their net purchases grew from roughly 145 billion won ($106 million) early in the day to 2.21 trillion won by the close. The KOSDAQ closed slightly higher. Korean individual investors are nicknamed the ants for banding together to buy during market declines. The nickname dates to 2020, when individual investors absorbed a wave of foreign selling during the pandemic crash. They were largely vindicated by the rebound that followed. A leveraged exchange-traded fund tracking SK hynix lost 45% of its value earlier this year. The loss hit retail investors who held the fund as a long-term bet rather than a short-term trade. Samsung Electronics and SK hynix were the two stocks driving Monday's decline. Both fell more than 5%. Their swings had already made the KOSPI more volatile than Bitcoin this year. If retail buyers picked a floor, Samsung Electronics and SK hynix should stabilize within days. If retail buyers picked a floor, the KOSPI could retest 7,000 quickly. If retail buyers did not pick a floor, Monday's foreign selling may be only the opening move. If retail buyers did not pick a floor, Goldman's target could look further away than it already does.