Financial Stocks Plummet in U.S. Market, Foreigners Turn to Net Sellers

Domestic financial stocks have experienced a sharp decline, with financial holding companies, insurance, and securities companies all failing to avoid the downward trend. This downturn is attributed to foreign investors’ capital outflow, triggered by the decline in financial stocks in the U.S. stock market.

According to the Korea Exchange, major financial groups such as KB Financial Group (-6.03%), Shinhan Financial Group (-6.18%), Hana Financial Group (-6.5%), and Woori Financial Group (-4.36%) all saw significant declines.

Additionally, Hanwha Investment & Securities (-4.27%), Kiwoom Securities (-5.3%), and Mirae Asset Securities (-3.41%) fell by 3-4%, while insurance companies like Samsung Life Insurance (-3.81%), DB Insurance (-4.8%), Hanwha Life Insurance (-4.12%), and Hanwha General Insurance (-3.39%) also experienced substantial losses.

The primary reason for this downturn is the large-scale net selling by foreign investors. On the same day, foreigners net sold KB Financial Group stocks worth 34.6 billion won, ranking as the sixth largest net foreign selling amount among domestic stocks. Hana Financial Group (7th place, 34.3 billion won) and Woori Financial Group (10th place, 12.7 billion won) followed suit.

The sharp decline in financial stocks in the U.S. stock market is cited as the reason for the outflow of foreign capital. Goldman Sachs’ forecast on the 9th (local time) predicted a 10% decrease in trading revenue for the third quarter, while JP Morgan Chase also lowered its expectations for interest income on the same day.

As a result, Goldman Sachs fell 4.39% and JP Morgan Chase fell 5.19%. This downturn is interpreted as a result of the outlook that if the global economic slowdown becomes a reality, it will have a negative impact on the profitability of financial companies.

The decline in securities and insurance stocks also appears to be the result of foreign capital outflow. Among the stocks with the largest declines, Kiwoom Securities saw a net selloff of over 2.7 billion won by foreigners on the day, and Samsung Life Insurance also saw a net selloff of 2.4 billion won.