Korean Retail Investors Bet Big Against Market Decline

Korean retail investors made a bold move on Monday by buying $1.6 billion in stocks, despite the market's decline. The KOSPI index fell 2.70% after markets reopened from the Chuseok holiday, with foreign investors selling $2.4 billion and institutions adding $750 million more to their sales.

The retail traders, known as 'the ants,' treated the drop as a buying opportunity rather than a warning sign. They accelerated their buying as the session wore on, with net retail purchases growing from $106 million early in the day to $2.21 trillion by the close.

This pattern is not new for Korean individual investors. In 2020, they absorbed a wave of foreign selling during the pandemic crash and were largely vindicated by the rebound that followed.

However, this time may be different. Samsung Electronics and SK hynix, the two stocks driving Monday's decline, fell more than 5%, extending swings that have already made KOSPI more volatile than Bitcoin this year.