Trading activity in South Korean stocks continues to cool, with the KOSPI turnover rate falling for a sixth straight month to its lowest level of the year, while retail and foreign investors sold a combined net total exceeding 16 trillion won as the market waits for US PCE data and Micron earnings to offer direction.

Korea Exchange data shows that from the 1st to the 23rd of this month, the average daily turnover rate of KOSPI-listed stocks dropped to 0.50%, the lowest level so far this year. Shares of Samsung Electronics and SK Hynix each fell more than 5% in a single day, dragging the index back below the 7,000-point mark on the 28th, where it closed at 6,889.74.

High interest rates and oil price pressures have kept sidelined capital from flowing back in, with cash held in brokerage accounts waiting to enter the market only slightly above 100 trillion won. Market participants say that only once macroeconomic pressures ease and third-quarter corporate earnings guidance meets expectations will funds be likely to return to the market.

Turnover Rate Falls for Six Consecutive Months, Trading Activity Hits Yearly Trough

Korea Exchange data shows the KOSPI average daily turnover rate has steadily declined after peaking at 1.74% in March — falling to 1.48% in April, 1.13% in May, 0.81% in June, 0.72% in July, 0.54% in August, and narrowing further to 0.50% this month, marking six consecutive months of decline.

The turnover rate is calculated by dividing trading volume by the total number of listed shares and is a core indicator of market trading activity.

Analysts note that short-term trading, which had briefly picked up during the sharp market swings in June and July, has clearly cooled, with investors waiting for a clearer market catalyst. Retail investors tend to trim positions on rallies when prices approach their cost basis, while foreign investors have likewise stayed on the sidelines amid interest rate and oil price pressures.

During the statistical period this month, retail and foreign investors recorded net selling of 16.69 trillion won (about US$11.9 billion) and 16.42 trillion won (about US$11.7 billion), respectively, on the KOSPI main board.

Samsung and SK Hynix Buybacks Near Completion, Market Support Weakens

The share buyback programs of Samsung Electronics and SK Hynix, which had provided some support to the market, have now been completed at 85.95% and 66.27% respectively as of the 28th, leaving increasingly limited room for further purchases and correspondingly weakening their effect of underpinning the index.

Meanwhile, investor margin balances parked in brokerage accounts awaiting entry stood at 101.63 trillion won as of the 23rd, only slightly above the 100 trillion won threshold.

On the 28th, weighed down by a sharp rise in US long-term Treasury yields, Samsung Electronics and SK Hynix fell 5.05% and 5.43% respectively, closing at 270,000 won and 1,768,000 won, becoming the main drags as the KOSPI plunged 2.70% that day.

In addition, concerns over delays in AI data center construction by US software company Oracle further weighed on investment sentiment.

Eyes Turn to Fundamentals, PCE Data and Micron Earnings Become Key Milestones

Investors are now focused on two major releases due on the 30th: the US August personal consumption expenditures (PCE) price index and Micron Technology's quarterly results. These data points are seen as key references for judging whether the market can stabilize and rebound.

Lee Kyoung-min, a researcher at Daishin Securities, said: "The core of the issue is not the interest rate itself, but what kind of momentum can overcome interest rate pressure. The market's focus will now shift to fundamentals."

Multiple securities analysts believe that only if macroeconomic pressures ease substantially and corporate earnings-season guidance meets market expectations will sidelined capital be in a position to flow back in. Until then, whether the KOSPI can regain its footing above 7,000 points still depends on support from the external environment.