BlockBeats News, August 19th. According to Korean media reports, influenced by the sharp rise in long-term bond yields in the United States and Japan, foreign investors who had previously driven the rebound of the South Korean stock market began massive sell-offs. On August 19th, foreign investors net sold ₩3.485 trillion, institutions net sold ₩1.324 trillion, while individuals net bought ₩4.633 trillion to absorb the chips.

During the 5 trading days from August 11th to 18th, foreign investors had been net buyers continuously, with a cumulative net purchase of ₩8.129 trillion. However, the scale of their single-day sell-off on the 19th was equivalent to 42.9% of the net purchase amount in the previous 5 days. Recently, foreign investment had been heavily concentrated in the semiconductor sector, with approximately 87% of the net purchase from August 12th to 18th flowing into the semiconductor sector, mainly focusing on Samsung Electronics and SK Hynix.

The shift in foreign investment flow is related to the sharp rise in U.S. and Japanese long-term interest rates. The U.S. 30-year bond yield rose to 5.337% during trading on the 18th, hitting a new high since 2007, and long-term rates in Japan also surged. The increase in U.S. bond yields is more attributed to bond supply, rising term premiums, and large tech companies issuing more corporate bonds driven by AI data center investments, rather than the market speculating on a Fed interest rate hike.

Analysis suggests that if long-term interest rates continue to rise, South Korean semiconductor stocks, which foreign investors have recently heavily bought into, may face further profit-taking. If rates stabilize, funds may flow back into the semiconductor sector with high earnings visibility. Han Ji-young, a researcher at Kiwoom Securities, believes that macro uncertainties in the future may increase stock market volatility, but the likelihood of a repeat of the abnormal fund deterioration and crash seen in July is low.