On Thursday, the anticipated blue wave materialized in the U.S. midterm elections, alleviating political uncertainties. However, foreign investors intensified their sell-off in the domestic stock market.

Concerns over potential tightening of regulations on artificial intelligence (AI) data centers came to the forefront, prompting foreign investors to offload a net 3.4 trillion KRW (about 2.5 billion USD) in KOSPI stocks. Despite individuals and institutions absorbing over 3 trillion KRW (about 2.2 billion USD) in purchases, the KOSPI still plummeted by more than 5%.

The Korea Exchange reported that the KOSPI closed at 5,383.80, plunging 300.00 points (5.28%) from the previous trading day. The KOSDAQ also took a hit, falling 5.11% to close at 678.41. Both markets triggered sell-side circuit breakers during the session.

Foreign investors extended their selling streak in the KOSPI market for the fifth consecutive trading day, offloading a net 3.3928 trillion KRW (about 2.5 billion USD). Meanwhile, individual investors and institutions stepped in, purchasing a net 2.2722 trillion KRW (about 1.68 billion USD) and 845.7 billion KRW (about 626 million USD), respectively.

The KOSPI experienced significant volatility, particularly when institutional buying momentum fluctuated amid persistent foreign selling.

Koscom CHECK data revealed that at 9:45 a.m (KST), institutions had net purchases of 185 billion KRW (137 million USD), but by 10:21 AM, they had reversed to net sales of 85 billion KRW (about 63 million USD). During this period, the KOSPI tumbled from 5,504.27 to 5,402.06, shedding 102.21 points. This sharp decline triggered a sell-side circuit breaker in the KOSPI market.

Subsequently, as institutions resumed their net buying, the index staged a rebound. By 11:30 a.m. (KST), institutional net purchases had recovered to 176.6 billion KRW (about 131 million USD), pushing the KOSPI back above the 5,500 mark.

However, foreign selling pressure persisted. The cumulative net selling by foreign investors ballooned from 965.5 billion KRW (about 714 million USD) at 10:21 a.m. (KST) to 1.5396 trillion KRW (about 1.14 billion USD) by 11:30 a.m. (KST). Despite the resurgence in institutional buying, it only managed to temper the index's decline during this period.

As the afternoon session progressed, foreign selling intensified, overwhelming institutional buying efforts to stem the index's fall. By 3:00 p.m. (KST), institutions had increased their cumulative net purchases to 596.6 billion KRW (about 441 million USD), up about 420 billion KRW (about 311 million USD) since 11:30 a.m. (KST). Individual investors also ramped up their net purchases to over 1 trillion KRW (about 739 million USD).

In contrast, foreign investors' cumulative net selling had swelled to 3.1243 trillion KRW (about 2.3 billion USD) by the same time, an increase of over 1.58 trillion KRW (about 1.2 billion USD). Consequently, the KOSPI plummeted from 5,499.66 to 5,342.12, shedding 157.54 points.

Interestingly, foreign investors switched to net buying in the futures market towards the end of the trading day. In the KOSPI 200 futures market, they ultimately purchased a net 4,910 contracts, while institutions sold 5,508 contracts.

On Wednesday, it had witnessed a similar pattern, with the index direction shifting due to institutional buying amid foreign selling. Foreign investors had offloaded over 2.5 trillion KRW (about 1.9 billion USD) in KOSPI stocks, but robust institutional buying in the afternoon helped the index recover its losses, closing up 0.62%.

Kim Seok-hwan, an analyst at Mirae Asset Securities, noted that despite a steep intraday drop of over 4%, institutional demand, particularly from pension funds, surged in the afternoon, resulting in a weak start, strong finish scenario. He added that today, relentless foreign selling pressure caused institutional holdings, which had initially provided support, to evaporate at one point, triggering a sell-side circuit breaker in the KOSPI.

Kim concluded that with foreign investor sentiment remaining fragile, the KOSPI's direction is likely to be highly sensitive to institutional flows in the near term.

On Thursday, the anticipated blue wave materialized in the U.S. midterm elections, allevia …

KOSPI Plummets Over 5%: What Foreign Investors Are Selling in 2026