South Korea's National Pension Service (NPS), which dominates the country's pension fund sector, net purchased 28.3 billion won in Korean stocks from July 1 to July 21 despite earlier market concerns about massive selling pressure from resumed rebalancing. The buying activity intensified during the market downturn, with five consecutive trading days of net purchases totaling 301.5 billion won from July 14 to 21, according to Korea Exchange data. The shift occurred as the KOSPI index plummeted approximately 20.4% from 8470 on July 1 to 6740 on July 21, naturally reducing the NPS's domestic stock weight and easing the anticipated rebalancing-driven selling pressure that had worried investors since the fund announced it would resume portfolio adjustments in July after suspending them in January.
NPS Conducted Five-Day Buying Spree Amid Market Decline
Pension funds, predominantly composed of the NPS, executed net purchases across 14 trading days during the July 1-21 period in the securities market. The buying activity concentrated in the latter half of the measurement period, with the fund purchasing 301.5 billion won worth of stocks over five consecutive trading days from July 14 to July 21.
The market had anticipated tens of trillions of won in potential selling volume when NPS resumed rebalancing operations in July after halting them in January to align domestic stock holdings with target allocation levels. However, the sharp 20.4% KOSPI decline from 8470 to 6740 during the period altered the dynamic. The stock price decline organically reduced the domestic equity weight in the NPS portfolio, substantially diminishing the mechanical selling pressure associated with rebalancing, according to market analysis.
SK Hynix Led NPS Purchase List With 445.8 Billion Won
The pension funds focused purchases on stocks that experienced significant price declines. SK Hynix topped the net purchase list at 445.8 billion won, while the stock declined 25.1% during the same period. The fund also increased positions in banking and insurance stocks in alignment with the interest rate environment.
Other major net purchases included SK Innovation (156.7 billion won), S-Oil (155.2 billion won), Hana Financial Group (92.7 billion won), Korean Air (90.2 billion won), Shinhan Financial Group (86.4 billion won), and DB Insurance (86.4 billion won). The pension funds also acquired KOSPI 200 index-tracking exchange-traded funds, purchasing 222.1 billion won of TIGER 200 and 92.8 billion won of KODEX 200.
Analysts Expect Flexible Approach Within Target Range
Market observers assess that while NPS's domestic stock selling burden decreased significantly from initial concerns, the fund is unlikely to transform into an aggressive net buyer. An industry source stated that the recent sharp decline appears to have substantially alleviated the NPS's mechanical selling pressure. However, the source noted that rather than net purchasing at levels sufficient to actively lift the market, the NPS will more likely respond flexibly within the range of maintaining target allocation weights.
FAQ
How much did South Korea's National Pension Service buy in Korean stocks during July 2026?
The National Pension Service and other pension funds net purchased 28.3 billion won in Korean stocks from July 1 to July 21, with concentrated buying of 301.5 billion won occurring over five consecutive trading days from July 14 to 21.
Why did the National Pension Service buy stocks instead of selling during rebalancing?
The KOSPI index fell approximately 20.4% from 8470 to 6740 between July 1 and July 21, which naturally reduced the domestic stock weight in the NPS portfolio and eased the anticipated selling pressure from rebalancing operations that resumed in July after being suspended in January.
