The KOSPI has extended a record rally this year, but foreign investors have net sold more than 9 trillion won, moving in the opposite direction to institutions that have strengthened buying, data showed.

According to the Korea Exchange on Feb. 22, foreigners net sold 9.16 trillion won in the KOSPI market from the start of the year through Feb. 20.

That is about double foreigners' net KOSPI sales for all of last year of 4.66 trillion won.

Foreigners also net sold 3.8 trillion won in the KOSPI200 futures market this year.

With the KOSPI surging 38 percent this year and staying elevated, foreign investors have moved to take profits in large numbers.

Foreigners' selling was heavily concentrated in semiconductor stocks.

Foreigners sold a net 9.55 trillion won of Samsung Electronics this year, the largest net sale.

Samsung Electronics shares have surged 59 percent this year alone. On Feb. 19, it also reached 190,000 won for the first time.

Foreigners instead appeared to view that as a chance to take profits and sold heavily.

The second most-sold stock was SK Hynix, with net sales of 5.97 trillion won.

Hyundai Motor, which rose sharply early this year on robotics momentum, was third with net sales of 5.29 trillion won.

It was followed by SK Square with 637.0 billion won, Hyundai Mobis with 609.0 billion won and Hyundai Glovis with 542.0 billion won.

Experts, however, see foreigners' recent selling as likely temporary supply driven by the scale of the earlier surge rather than a bet on a sustained downtrend.

Lee Kyung-min (이경민), an analyst at Daishin Securities, said in a phone call with Yonhap News that while foreigners are showing selling pressure in the KOSPI market this year, it is hard to see it as a bet on a sustained decline in the KOSPI. He said that, given most selling is concentrated in semiconductor stocks, it looks like a short-term rebalancing process to reduce exposure to stocks that have risen a lot.

The brokerage industry 분위기 indicates expectations for further gains persist despite the recent surge in stocks.

Recently, Korea Investment & Securities raised its KOSPI target for this year to 7,50 from 5,650, citing a sharp jump in profits at semiconductor companies.

Some in the brokerage industry are also raising concerns about overheating in the stock market.

Heo Jae-hwan (허재환), an analyst at Eugene Investment & Securities, said the KOSPI's PBR is approaching 2 times, the first time since the early 1990s, the early 2000s, and since 2007 to 2008. He said it has a positive meaning that undervaluation has been resolved, but it can also be seen as a point where limits to further valuation gains could emerge.

He added that it is now time to gradually consider both corporate profitability and valuation at the same time, and pointed out that while semiconductors and shipbuilding have high profitability, valuations based on asset value are not particularly cheap.

DB Financial Investment also lowered its forecast for the lower end of the KOSPI range for the first half of this year to 4,300 points from 4,500 points, saying accelerated AI facility investment could lead to reduced consumption and rising prices.

Kang Hyun-gi (강현기), an analyst at DB Financial Investment, said in a report that hyperscalers, or AI facility operators, are accelerating AI facility investment, which could raise U.S. credit spreads as employment falls and consumption declines.

He also said AI facility investment is driving up copper and semiconductor prices and stoking so-called 'AIflation', acting as a friction factor for U.S. policy rate cuts. He said this contains the possibility of increased volatility after further gains in semiconductor stocks.

Against this backdrop, Nvidia's earnings report scheduled for Feb. 25 is seen as a watershed that will determine the market's direction ahead.

Na Jung-hwan (나정환), an analyst at NH Investment & Securities, said Nvidia's earnings report is an important event that could open the possibility of a shift in momentum as AI-related stocks remain weak on concerns about AI profitability. He said the key is not the earnings figures but whether guidance and profitability indicators such as GPM, or gross profit margin, are maintained, and that if some uncertainty eases, the market's focus will shift from monetisation debates to growth visibility.

[Yonhap News Agency]