Despite avoiding a 'Black Thursday,' investor sentiment remains low. The South Korean stock market has seen three consecutive days of decline, with individual investors exiting the market to realize profits, even after Samsung Electronics reported strong second-quarter results. The decline in investor deposits and margin trading balances indicates a shrinking appetite among retail investors.
On July 30, the KOSPI closed at 5,593.56, down 69.68 points (1.23%) from the previous trading day. The index opened at 5,681.77, up 18.53 points (0.33%), but fluctuated throughout the day, ultimately widening its losses in the afternoon. The KOSDAQ also fell, closing at 644.78, down 17.90 points (2.70%). While foreign and institutional investors bought a net 1.33 trillion won and 665 billion won, respectively, they were unable to reverse the downward trend.
Samsung Electronics initially supported the market, with its stock surging 8.39% to 226,000 won after announcing record earnings for three consecutive quarters, temporarily boosting sentiment for semiconductor stocks. SK Hynix also saw a brief rise of 4.14%. However, both stocks later reversed course, closing down 0.72% and 5.64%, respectively, causing the KOSPI to relinquish its earlier gains.
As foreign and institutional investors defended the index, individual investors sold off a net 1.42 trillion won in the KOSPI. The decline in investor sentiment is further reflected in the drop in deposits. According to the Korea Financial Investment Association, investor deposits stood at 109.593 trillion won as of July 29, a 21.55% decrease from this year's peak of 139.695 trillion won on June 4. The scale of margin trading has also decreased, with the combined balance for the KOSPI and KOSDAQ markets falling to 32.995 trillion won, down 14.59% from 38.633 trillion won on June 24.
Brokerages that had previously raised target prices for Samsung Electronics and SK Hynix, driven by an anticipated AI semiconductor supercycle, have recently begun to lower their forecasts. According to financial information provider FnGuide, Shinhan Investment Corp. cut its target price for SK Hynix from 4.2 million won to 2.7 million won, Hanwha Investment & Securities from 4.3 million won to 3.15 million won, NH Investment & Securities from 4.1 million won to 3.4 million won, and Daishin Securities from 3.9 million won to 3.2 million won. The previous day, Mirae Asset Securities reduced its target price for Samsung Electronics from 550,000 won to 370,000 won, a 33% decrease.
Market analysts believe that the recent stock price adjustments are more influenced by a decline in investor sentiment than by actual performance. Han Ji-young, a researcher at Kiwoom Securities, noted, "Currently, negative narratives surrounding the semiconductor sector, such as profit peak-out and the end of the AI investment cycle, are forming. However, it is important to recognize that fundamental deterioration has not yet materialized, and earnings estimates are not significantly declining. We expect a rebound as we approach the major earnings events scheduled for early August."
* This article has been translated by AI.
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