Foreign buying on KOSPI hits 17-month high, but market faces headwinds

Samsung Electronics headquarters in Seoul / Yonhap

By Lee Kyung-min

• Published Aug 3, 2025 3:28 PM KST

Foreign investors net bought over 6.2 trillion won ($4.4 billion) on Korea’s main KOSPI bourse last month, the highest figure in 17 months, the Korea Exchange (KRX) said Sunday.

However, market analysts expect a correction this month due to continued U.S. tariff uncertainties and weak earnings from domestic companies.

According to the KRX, July’s foreign purchases of 6.28 trillion won was the highest monthly figure since February last year, when it surpassed 7.8 trillion won. The July figure is more than double June’s total of over 2.69 trillion won.

After peaking at 7.8 trillion won in February last year, foreign investors’ net purchases slowed gradually, eventually turning to net selling in August that year.

This selling trend continued for nine consecutive months until April this year. However, foreign buying resumed in May with net purchases of around 1 trillion won, marking a net-buying position for three straight months through July.

According to Daishin Securities, the three months of optimism can be explained by the Lee Jae Myung administration’s drive to boost the stock market, coupled with tangible outcomes from Korea-U.S. tariff negotiations and the greater earnings of Samsung Electronics.

“An improved outlook on Samsung Electronics, Korea’s top semiconductor powerhouse, inevitably factors into how foreign investors assess the Korean stock market,” the report said.

Foreign investors bought nearly 3.5 trillion won of Samsung Electronics shares last month, accounting for 56 percent of the total net foreign purchases on the main bourse.

Still, analysts noted that foreign investor inflows may lose momentum this month amid the growing impact of U.S. tariffs and mounting concerns over weakening earnings by Korean companies. This raises the likelihood of a potential market correction.

Kiwoom Securities said in its report that the semiconductor sector is among the most vulnerable to U.S. tariffs, and therefore, demand for Samsung Electronics shares is expected to be weaker this month compared to June and July.

“The issue of higher corporate taxes could also contribute to broader market uncertainties,” the report added.

The recent strength of the dollar is likely to weaken further foreign net buying, according to a NongHyup Investment & Securities report.

“The recent dominance of the U.S. currency is underpinned by concerns over tariff-induced inflation, coupled with expectations of strong dollar demand driven by large investments in the U.S. The dollar strength is expected to continue without major shocks from U.S. jobs data,” it said.

Meanwhile, Rep. Kim Byung-kee, acting leader and floor leader of the ruling Democratic Party of Korea, said on social media that the KOSPI 5,000 task force will review measures to restore investor confidence in the local stock market.

President Lee Jae Myung had long pledged to boost the KOSPI to 5,000 points as part of his key campaign pledges.