Foreign Investors Pour $1.3B into Korean Tech Stocks, Fueling Year-End KOSPI Rally

Foreign investors have staged a dramatic return to the South Korean stock market in December, purchasing a net 1.9 trillion won (US$1.3 billion) and focusing their capital on large-cap technology and automotive shares. This marks a sharp reversal from November, when they offloaded shares, signaling renewed confidence in key Korean industries heading into the new year.

A Sharp Reversal in Capital Flow

Data from the Korea Exchange on Tuesday showed the net buying occurred in the KOSPI market between Dec. 1 and Monday. The buying spree continued into Tuesday morning, with foreigners adding another net 373.2 billion won as of 11:10 a.m. The inflow stands in stark contrast to November, when offshore investors sold a net 14.4 trillion won worth of stocks.

AI and Autos Drive the Rally

Analysts suggest the renewed interest is fueled by a combination of global tech momentum and favorable local conditions. The global AI stock boom is a significant tailwind; on Monday, U.S. chipmaker Micron Technology's shares hit an all-time high of $230.55 after signaling robust demand for its AI-focused memory chips. This positive sentiment appears to be spilling over to its South Korean counterparts.

Foreigners and institutions have turned net buyers and are leading the year-end stock rally, boosted by favorable factors from the U.S. stock market, including recent advances in AI-related stocks.

— Han Ji-young, Analyst at Kiwoom Securities Co.

The auto sector has also gained traction after a trade deal between Seoul and Washington in October eased tariff uncertainties, improving the outlook for major carmakers. According to Han, the market is likely to continue this upward trend on "continued semiconductor momentum and growing anticipation for a Santa Claus rally."

Top Picks: Who's Winning the Inflow?

The buying activity has been concentrated in industry leaders. Semiconductor giant SK hynix was the top pick, with foreign investors purchasing a net 824.7 billion won. Investors also acquired 426.1 billion won in preferred shares of Samsung Electronics and 322.1 billion won in automaker Hyundai Motor.