KOSPI Shows No True Sector Rotation as Foreigners Sell at 7,000, Retail Concentrated in Semiconductors

According to iM Securities research report released on July 27, the Seoul stock market (KOSPI) has not yet shown true sector rotation despite recent rebound, as foreign investors repeatedly sell whenever the index approaches the 7,000 mark while retail investors concentrate buying only in semiconductor stocks. Foreign investors turned to net selling the day after KOSPI hit 7,284 on July 16, and again after the index closed at 7,096 on July 23, suggesting they view the 7,000 level as a neutral supply-demand zone. Retail investors have focused purchases solely on Samsung Electronics and SK Hynix, while selling other sectors, following their experience of the past six months when semiconductor stocks drove returns. Additionally, lingering high credit margin balances remain a headwind, potentially triggering profit-taking as the index rises further.
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