Foreign Investors Sold $14.16 Billion of Korean Stocks in September

Foreign investors sold a net $14.16 billion of South Korean shares in September, reversing the modest return to net buying seen a month earlier, according to data released Friday by the Bank of Korea.

The sharp swing marked a renewed retreat from Korean equities after offshore investors purchased a net $40 million in August. That August inflow had interrupted a run of net selling that began in January, but the change proved short-lived as financial conditions and concerns surrounding technology investment again pressured sentiment.

The central bank attributed the selling partly to higher bond yields and worries about the scale of investment in artificial intelligence infrastructure. Investors were also assessing the risk that prolonged tensions in the Middle East could add to inflationary pressure. Those concerns can affect expectations for interest rates and the valuation of growth-sensitive assets, including the technology stocks that carry substantial weight in South Korea’s market.

Foreign investors reduced their exposure to Korean fixed-income assets as well. They sold a net $5.81 billion of local bonds in September, extending the $4.53 billion net sell-off recorded in August. The simultaneous withdrawal from stocks and bonds indicates that September’s shift was not confined to a single asset class.

The figures provide a snapshot of overseas portfolio flows during a month when investors were balancing Korea-specific opportunities against broader uncertainty over inflation, interest rates and the sustainability of AI-related spending. Foreign capital flows are closely watched because they can influence share prices, bond demand and currency-market conditions.

Despite the sizable outflows, the Korean won strengthened over the course of the month on the central bank’s end-of-period comparison. The currency stood at 1,352.8 won per U.S. dollar at the end of September, compared with 1,368.6 won per dollar at the end of August. A lower won-per-dollar figure represents an appreciation of the Korean currency.

The contrast between a firmer won and heavy portfolio selling underscores that exchange rates are shaped by multiple forces beyond monthly foreign investment in stocks and bonds. The latest data nevertheless show that overseas investors remained cautious toward Korean financial assets after August’s brief return to equity purchases.