KOSPI Struggles to Break 7,000 Points as Over 100 Trillion Won in Individual Investor Supply Overhang Looms

Individuals Heavily Concentrated Between 7,500 and 8,500 Points
Each Rebound Spurs "At Least To Break Even" Selling
KOSPI Likely to Move Sideways Within a Short-Term Range

The KOSPI is attempting to break through the 7,000-point mark, but a massive block of individual investor shares is proving to be an obstacle. While there is relatively less supply pressure in the 6,000 to 7,000-point range, analyses suggest concentrated selling from investors seeking to recoup their principal above the 7,000-point level.

According to Kiwoom Securities on September 1, 2026, the total net purchases by individual investors amassed above the 7,000-point index level since the KOSPI surpassed 6,000 have reached approximately 87 trillion won. When adding net inflows related to individual investors’ ETF and derivatives trading through financial investment (about 24.5 trillion won), the supply overhang amounts to nearly 111.5 trillion won. Every time the index rebounds, the pressure from investors seeking to recover previous losses exerts downward pressure on the upper end of the range.

Breaking it down by range: the 7,000–7,500-point zone sees individual net purchases of 18.9 trillion won (20 trillion won including financial investment); 7,500–8,000 points, 30.2 trillion won (35.7 trillion won including financial investment); 8,000–8,500 points, 28.3 trillion won (37.5 trillion won including financial investment); 8,500–9,000 points, 6.2 trillion won (14.5 trillion won including financial investment); and 9,000–9,500 points, 3.4 trillion won (3.8 trillion won including financial investment).

According to analysis by iM Securities, after tallying net individual purchases since October of last year, individual investor supply blocks formed above 7,000 points total 173.9 trillion won: 37.8 trillion won at 7,000–7,500 points, 60.4 trillion won at 7,500–8,000 points, 56.6 trillion won at 8,000–8,500 points, 12.3 trillion won at 8,500–9,000 points, and 6.8 trillion won at 9,000–9,500 points.

The supply-demand distortion is even more pronounced in the semiconductor sector, which commands a significant weight within the KOSPI. So far this year, foreign investors have offloaded large net sales of Samsung Electronics (79.1 trillion won) and SK hynix (69.8 trillion won), while individual investors have taken up these shares—52.6 trillion won of Samsung Electronics and 51.1 trillion won of SK hynix.

The leverage burden across the broader KOSPI has eased, but credit-related supply in the semiconductor sector remains at elevated levels. The total KOSPI margin loan balance has dropped by about 10% from its peak, with its ratio to market capitalization now at the average annual level (0.46%). In contrast, credit balances in the semiconductor sector remain in the 11 trillion won range, with only a 6% decrease from the peak, and the market cap ratio is 0.37%, far exceeding the historical average (0.16%). Analysts warn this could create significant selling pressure to repay margin loans should semiconductor stocks rebound in the future.

The issue is that much of the individual buying happened at price levels above the current stock price. Net individual purchases of Samsung Electronics above 250,000 won amount to 21.8 trillion won, while for SK hynix above 1.6 million won, the figure reaches 37.2 trillion won. During July and August, individuals were net sellers of Samsung Electronics (14.5 trillion won) and SK hynix (16.8 trillion won) on days the stock prices climbed, while acting as net buyers—20.8 trillion won and 27.1 trillion won, respectively—on days prices declined. This contrarian behavior acts as a constraint on the KOSPI's upper range.

However, the prevalent view is that while supply-related overhangs may slow the pace of the market’s advance, they are unlikely to fundamentally reverse its upward direction. If earnings momentum and positive catalysts persist, the market may be able to digest this supply and push higher. In fact, the 2026 consensus for KOSPI operating profit was revised up from 974 trillion won at the end of July to 990 trillion won recently. Despite this, the 12-month forward price-to-earnings ratio (PER) remains in undervalued territory, around 5.5 times, because stock prices have stagnated.

Experts expect resistance at the upper end of the range to persist for the time being. Han Ji-young, a researcher at Kiwoom Securities, commented, "Upward revisions to KOSPI operating profit consensus ahead of the third-quarter earnings season, along with strong earnings from U.S. semiconductor firms like Broadcom and Micron, could help stabilize the supply-demand dynamics and investor sentiment for Korean semiconductor stocks. However, heavy blocks of individual shares concentrated above 7,500 points may result in short-term resistance during the month."

Kim Junyoung, a researcher at iM Securities, said, "Since net individual buying is concentrated between 7,500 and 8,500 points, resistance could intensify once the index passes 7,000 points. As many individual investors gained experience during the July correction, we are likely to see a pattern of them gradually lightening their positions rather than turning aggressively net buyers."

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