Retail investors have recently been betting on a decline in the KOSPI by selling exchange-traded funds (ETFs) tracking the KOSPI 200 index and purchasing inverse ETFs. Over the past month, net sales by retail investors alone in the KOSPI reached 18.3816 trillion won.
According to KOSCOM's ETF Check released on the 14th, as of the 11th, the ETF with the highest net sales by retail investors was "KODEX 200," with net sales amounting to 694.8 billion won. The second most-sold ETF was "KODEX Leverage," recording net sales of 602.9 billion won.
In contrast, retail investors made net purchases of "KODEX 200 Futures Inverse 2X" and "KODEX Inverse," which generate profits when the KOSPI falls, amounting to 200.1 billion won and 130 billion won, respectively. Retail investors appear to believe that the probability of a KOSPI decline is higher.
During the same period, retail investors continued their net-selling trend in the KOSPI market itself. They sold stocks worth 18.3816 trillion won in the KOSPI. Notably, retail investors showed a strong tendency to sell when the KOSPI approached the 7,000 level.
On the 7th, retail investors executed net sales of 6.8374 trillion won in a single day, on which the KOSPI closed at 6,995.39. Over the past month, the KOSPI touched the 6,900–7,000 range during trading sessions on 11 trading days; among these, retail investors recorded net sales on 7 of those days.
Lee Sang-yeon, a researcher at Shinhan Securities, stated, "Since many retail investors have an average purchase price in the early 7,000s, selling pressure is emerging primarily from them as the KOSPI approaches 7,000." He added, "This has been compounded by heightened risk-aversion sentiment ahead of recent U.S. inflation data releases and the September FOMC (Federal Open Market Committee) meeting."
Experts in the financial investment industry forecast that box-range trading between 6,000 and 7,000 will continue for the foreseeable future. This is due to remaining major events such as the FOMC and escalating tensions between the United States and Iran. Foreign investors also have not provided positive supply-demand conditions, having net-sold 6.8362 trillion won over the past month. Analysts suggest that the KOSPI will likely remain sluggish until third-quarter earnings momentum picks up.
Han Ji-young, a researcher at Kiwoom Securities, explained, "Support near the KOSPI 7,000 level, the resumption of net purchases by foreign investors, and whether semiconductor leadership is maintained are key factors." She noted, "Although the KOSPI recovered to the 7,000 line for the first time in 33 trading days last week amid foreign investor net purchases, macroeconomic uncertainty toward the end of the week triggered foreign net selling, pushing the index back down to the 6th,900s. Therefore, it is difficult to regard 7,000 as a firm support line."
However, advice suggests that rather than indiscriminately selling, investors should wait, as external uncertainty may ease with the September FOMC meeting scheduled for the 15th–16th (local time), and earnings momentum is likely to begin afterward.
Kim Jae-seung, a researcher at Hyundai Motor Securities, said, "In the short term, supply-demand gaps and caution regarding macro events are expected to persist through mid-month." He added, "It may be difficult to find an immediate upward trigger." However, he noted, "Starting next month, as expectations for midterm election results become more concrete, a market rebound driven by reduced uncertainty surrounding the elections is anticipated. September and October should be viewed as opportunities to restructure portfolios and re-enter the market in preparation for the year-end rally."
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