28-05-2025
Stronger won spurs Korean sell-off in US stock market
Top US stocks lose favor as Korean investors pull back from Nvidia, Tesla, Apple
South Korean investors are offloading their holdings of US stocks, pressured by the appreciation of the Korean won and heightened stock market volatility.
According to data from the Korea Securities Depository, Korean investors have net sold $1.19 billion worth of US stocks so far this month. This marks a sharp reversal from their consistent net-buying trend in the US market from October through April.
Investors had poured a combined $14.8 billion into US stocks in the first four months of the year, undeterred even by the turbulence in April sparked by US President Donald Trump's tariff policy. In April alone, Korean investors net bought $3.76 billion worth of US shares.
However, this month has seen a significant shift, as Korean investors turned to net selling, largely due to the strengthening Korean won.
After plunging to nearly 1,490 won per dollar in April, the won has appreciated to the 1,360 range this week. This comes amid speculation that the US may pressure Asian countries to allow their currencies to appreciate in a bid to address its trade deficit. For Korean stock investors, a stronger won translates into reduced returns when converting US market gains back into local currency.
'Though the US stock market has rebounded, local investors are looking to lock in profits, as a stronger won could outpace market gains,' said Choi Ye-chan, an analyst at SangSangIn Investment & Securities.
Market analysts expect the won to continue its upward trend against the US dollar, potentially reaching the early 1,300 range by the end of the year.
'The lower bound of the won-dollar exchange rate should be revised from the previous 1,330 won to around 1,300 won this year,' Choi added.
Further weighing on sentiment, Moody's recent decision to strip the US of its last remaining triple-A sovereign credit rating has triggered jitters across financial markets. The downgrade prompted a broad sell-off in dollar-denominated assets, including stocks and government bonds.
Korean investors' sell-off has been particularly pronounced in blue-chip stocks. This month alone, they dumped approximately $1.5 billion worth of the top 50 most-held US stocks — exceeding the overall net selling amount of $1.19 billion.
Nvidia saw the largest outflows, with Korean investors offloading $524 million worth of shares. Tesla followed, with $183 million in net selling, marking the first monthly net-selling trend for Tesla among Korean investors.
Meanwhile, the net buying of Apple shares has also slowed. In April, Korean investors net bought $112 million worth of Apple stock. This month, that figure has slipped to around $100 million.
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