$32.37 Billion in Foreign Funds Exited Stock Market in June

Bank of Korea Releases "Trends in International Finance and Foreign Exchange Markets After June"

$30.72 Billion Net Outflow from Stock and Bond Markets

Investment Sentiment Weakens amid AI-Related Caution and Ongoing Rebalancing

In the domestic securities market, foreign capital recorded a net outflow for the fifth consecutive month. The scale of the net outflow, which was mainly driven by stocks, also expanded as foreign investors adjusted their domestic stock holdings (rebalancing) following the sharp rise in share prices.

On the 14th, employees are monitoring the stock market and exchange rates in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul.

According to the "Trends in the International Financial and Foreign Exchange Markets After June 2026" announced by the Bank of Korea on July 14, foreign capital in the domestic stock and bond markets posted a net outflow of $30.72 billion last month. This marks the fifth consecutive month of net outflows since February. The scale of the net outflow also expanded further in June, compared to the $26.15 billion recorded in May.

The increase in net outflows was primarily driven by stock funds. Last month alone, foreign stock funds posted a net outflow of as much as $32.37 billion. An official from the Bank of Korea explained, "The outflow was amplified due to a weakening of investor sentiment amid global concerns about artificial intelligence (AI) investments and the rebalancing following recent share price rallies."

Bond funds, on the other hand, recorded a net inflow of $1.65 billion. Despite the maturity of government bonds, the net inflow was supported by the increase in the weighting of Korean Treasury Bonds in the World Government Bond Index (WGBI). An official from the Bank of Korea stated, "Since the WGBI inclusion date in April, the proportion of Korean Treasury Bonds included in the index is expected to steadily increase each month over the next eight months—from 0.22% in April, to 0.46% in May, and to 0.67% in June."

The won-dollar exchange rate rose to 1,549.4 won at the end of June, up from 1,507.9 won in the previous month. This rise was attributed to the net selling of domestic stocks by foreign investors and increased uncertainty in the Middle East. As of July 10, the exchange rate had slightly declined to 1,501.4 won, affected by a narrowing in the strength of the U.S. dollar due to weaker-than-expected U.S. employment figures.

During June, the volatility of the won-dollar exchange rate also expanded compared to the previous month. The average daily fluctuation in June was 7.6 won, with a volatility rate of 0.50%.

This content was produced with the assistance of AI translation services.