Foreign Funds Stage Record Exit as Retail Buyers Drive Kospi to New Highs

Overview

• Foreign institutional investors have withdrawn more than 112 trillion won from South Korean equities so far in 2026, the largest outflow on record.
• Foreigners sold roughly 10 trillion won of Samsung Electronics and SK Hynix in one week, a wave that continued a 12-session selling streak that began on May 7.
• Capital from the semiconductor selloff flowed into robotics and battery or energy storage names and select Kosdaq stocks, with net buying in Doosan Robotics, Samsung SDI, Fadu and Seojin System.
• South Korean retail investors have absorbed much of the foreign selling and pushed the Kospi to all-time highs by buying directly and using leveraged funds or personal loans, which raises the market’s leverage and downside vulnerability.
• MSCI raised Korea’s EM index weight to 21.7%, a change that could trigger passive inflows even as strategists warn markets look overbought and the Korea Exchange’s volatility tools were briefly tested.