Foreign investors dump $62 billion in South Korean stocks as domestic traders absorb the blow

Foreign investors have sold more than 90 trillion won ($62 billion) in South Korean stocks so far in 2026, but domestic retail buyers have matched them nearly dollar for dollar. 

Local traders recently experienced a “Black Friday” where roughly 1.24 trillion won ($801 million) in foreign outflows from KOSPI-listed shares alone was recorded. 

South Korean “ants” are keeping the KOSPI running 

Foreign investors have pulled more than 90 trillion won ($62 billion) from South Korean equities so far this year, but the benchmark KOSPI index has still managed to rally more than 70% year-to-date due to domestic retail buyers, nicknamed the “ants” for their collective and coordinated purchasing power. 

The name was first used during the 2020-2021 pandemic rally, when Korean individual investors made similar coordinated purchases. Now, these ants have offset these massive outflows by pouring an estimated $70 billion back into the market. 

On June 5, a day now dubbed “Black Friday” by local traders, the KOSPI plunged over 5% in a single session as a single-day outflow of roughly 1.24 trillion won ($801 million) was recorded. However, the index stabilized within days as local investors bought the dip. 

The financial analysis firm, the Kobeissi Letter, cited Goldman Sachs data when it reported a net total of $75 billion in foreign outflows across all South Korean stocks for 2026, up to June 8, three days after Black Friday. 

Why are foreign investors selling if the market is doing so well?

South Korean stocks, led by Samsung Electronics and SK Hynix, have surged so much that the country’s weight in global indices like the MSCI Emerging Markets Index has grown to nearly 21%. 

With South Korea’s large share of the global index, passive funds that simply copy that index have to sell some Korean stocks to keep their investments from holding a larger percentage of Korea than the index itself allows.

Furthermore, the Korean won weakened to a 17-year low against the dollar during the sell-off, compounding losses for foreign holders, but the sheer scale of the profits made investors choose to cash out. The anticipated SpaceX IPO has also reportedly drawn capital back toward American markets.

Interestingly, Kim Seok-hwan, a researcher at Mirae Asset Securities, stated that foreign ownership of KOSPI stocks actually rose to 39.43% of the total market cap as of mid-May because the value of the shares they held onto, like Samsung, skyrocketed. 

The KOSPI pushed past the 7,000-point level in early May for the first time and now ranks among the strongest major equity indices globally in 2026.

However, even after the index crossed 7,000, foreign investors still offloaded more than 41 trillion won across nine straight trading sessions. $10 billion in net outflows was recorded in early June, with Samsung Electronics and SK Hynix bearing the brunt of the liquidation. Broadcom suffered a $285 billion market-cap wipeout in the same period, amplifying the damage and sending both stocks sharply lower.

A separate MSCI review in mid-June will evaluate whether Korea qualifies for developed-market index inclusion.

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