The KOSPI index has been stagnating in the high 6,000s, leading to a rapid decline in investor deposits. Analysts attribute the waning investor sentiment to domestic and international challenges that have kept the index from surpassing the 7,000 mark.
According to the Korea Financial Investment Association, as of August 28, the amount of investor deposits, which serve as standby funds in the stock market, was recorded at 99.8138 trillion won. This marks a decrease from 96.7091 trillion won the previous day, the lowest level since January 23, when it was 93.8095 trillion won.
Investor deposits had remained above 100 trillion won since late January, when the market was experiencing a clear upward trend. Since January 27, there have only been eight days where deposits fell below this threshold. Notably, on June 4, deposits peaked at an all-time high of 139.6948 trillion won but have since been on a downward trajectory.
The speed of money movement in the stock market has also significantly decreased. The Korea Exchange reported that the average daily trading volume for the KOSPI in August was approximately 25.37 trillion won, down from 50.35 trillion won in June, representing a reduction of about half, and a 31.2% decline from July's 36.88 trillion won. The turnover rate for listed stocks has also dropped for three consecutive months, falling from 17.1% in June to 15.9% in July and 10.7% in August. Similarly, the market capitalization turnover rate decreased from 15.3% to 14.28% and then to 9.3% during the same period, indicating a rapid decline in trading frequency and investor activity.
The decrease in investor deposits does not immediately indicate a depletion of individual investors' purchasing power. However, the simultaneous contraction of surrounding funds and actual trading indicators suggests that the KOSPI is losing internal market vitality, despite high volatility in the index.
The KOSPI has been in a 'new box' market, remaining below 7,000 since July 23. On the same day, the KOSPI closed at 6,820.02, up 31.14 points (0.46%) from the previous trading day, but fluctuated throughout the day. At one point, the index dropped to 6,547.76, a decline of 3.55%, before recovering towards the end of the session.
In terms of supply and demand, individual investors sold a net 1.443 trillion won, while foreign investors sold 6.403 trillion won, and institutions sold 7.929 trillion won. Conversely, net purchases by other corporations, likely reflecting share buybacks by Samsung Electronics and SK Hynix, reached 1.5773 trillion won, contributing to the index's rebound. The KOSDAQ index closed at 834.29, down 4.12 points (0.49%) from the previous trading day.
Lee Kyung-min, a researcher at Daishin Securities, noted, "Investor sentiment has weakened due to external factors, leading to a general downturn across sectors. However, some undervalued sectors have seen inflows of bargain buying, resulting in a differentiated market performance."
* This article has been translated by AI.
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