Key facts
- The KOSPI index surged over 5% on Thursday, briefly exceeding 9,000 points.
- Micron Technology's strong earnings report and a tech rally fueled the market's rise.
- Foreign investors sold a record 47 trillion won of South Korean stocks in May.
- U.S. investors were the largest sellers among foreign investors in May.
- Offshore investors' holdings in South Korean stocks reached a record 35.3% of total market capitalization by the end of May.
South Korean stocks experienced a significant surge on Thursday, with the KOSPI index briefly climbing above 9,000 points. This rally was primarily driven by positive earnings from U.S. chipmaker Micron Technology, which boosted sentiment in the technology and AI infrastructure sectors. The KOSPI gained 5.42%, closing at 8,930.30 points after an intraday high of 9,044.04.
However, the market's upward momentum was juxtaposed with a record outflow of foreign capital in May. Offshore investors offloaded a net 47 trillion won (US$30.4 billion) worth of South Korean stocks, surpassing the previous record set in March. This extensive selling continued throughout the first five months of the year, with net sales reaching 114.22 trillion won. By the end of May, foreign investors' holdings represented a record 35.3% of the total market capitalization.
U.S. investors were the most active sellers in May, accounting for a net sell-off of 28.86 trillion won, followed by Canadian investors with 4.2 trillion won. Despite the significant stock sell-offs, foreign investors were net buyers of local bonds in May, purchasing 11.72 trillion won worth, bringing their total bond holdings to 333.6 trillion won.