The South Korean KOSPI index fell below 7,000, with turnover hitting a new low for the year. Retail and foreign investors net sold over 33 trillion won in a single month.

Trading activity in the South Korean stock market continued to cool, with the KOSPI turnover rate declining for the sixth consecutive month to its lowest level this year. Retail and foreign investors simultaneously sold more than 16 trillion won in net transactions. The market awaits guidance from US PCE data and Micron's financial report.

Data from the Korea Exchange shows that from January 1st to 23rd, the average daily turnover rate of KOSPI listed stocks fell to 0.50%, the lowest this year. Shares of Samsung Electronics and SK Hynix each fell by more than 5% in a single day, dragging the index down below the 7,000-point mark again on January 28th, closing at 6,889.74 points.

High interest rates and oil price pressures have slowed the return of off-market funds, with brokerage accounts holding only slightly more than 100 trillion won awaiting market entry. Market analysts say that funds are only expected to return to the market if macroeconomic pressures ease and third-quarter corporate earnings guidance meets expectations.

Turnover rate has declined for six consecutive months, and trading activity has fallen to its lowest point this year.

According to data from the Korea Exchange, the daily turnover rate of KOSPI has been declining since its peak of 1.74% in March— down to 1.48% in April, 1.13% in May, 0.81% in June, 0.72% in July, 0.54% in August, and further narrowed to 0.50% this month, marking the sixth consecutive month of decline.

Turnover rate, calculated by dividing trading volume by the total number of listed stocks, is a core indicator for measuring market activity.

Analysts point out that short-term trading, which was active during the sharp market fluctuations in June and July, has cooled significantly, and investors are awaiting clearer market catalysts. Retail investors tend to reduce their positions when stock prices rebound to near their cost price, while foreign investors are also holding back due to pressure from interest rates and oil prices.

As of the end of this month, retail investors and foreign investors were net sellers of 16.69 trillion won (approximately US$11.9 billion) and 16.42 trillion won (approximately US$11.7 billion) respectively on the KOSPI main board.

Samsung and SK Hynix's share buyback program is nearing completion, weakening market support.

The share buyback programs of Samsung Electronics and SK Hynix, which previously provided some support to the market, have been 85.95% and 66.27% completed respectively (as of the 28th). The remaining buyback space is becoming increasingly limited, and the supporting effect on the index is correspondingly weakening.

Meanwhile, the margin balance of investors waiting to enter the market and sitting in brokerage accounts was 101.63 trillion won as of the 23rd, just slightly above the 100 trillion won mark.

On the 28th, dragged down by a sharp rise in US long-term Treasury yields, Samsung Electronics and SK Hynix fell by 5.05% and 5.43% respectively, closing at 270,000 won and 1,768,000 won, becoming the main drag on KOSPI's 2.70% plunge that day.

In addition, market concerns about delays in the construction of Oracle's artificial intelligence data center further dampened investment sentiment.

Turning our attention to fundamentals, PCE data and Micron's financial report become key turning points.

Investors are currently focused on two key data releases scheduled for the 30th: the U.S. August Personal Consumption Expenditures (PCE) price index and Micron Technology's quarterly earnings. These figures are considered crucial indicators for determining whether the market can stabilize and rebound.

Lee Kyoung-min, a researcher at Daxin Securities, said, "The core issue is not the interest rate itself, but what kind of momentum can overcome interest rate pressures. The market's focus will now shift to fundamentals."

Many securities analysts believe that only when macroeconomic pressures ease substantially and corporate earnings guidance meets market expectations will off-market funds have the conditions to flow back in. Until then, whether the KOSPI can regain its footing above 7,000 points depends on favorable external conditions.

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