Foreign investors are accelerating their pullback from South Korean equities, even as the market continues to hit record highs on domestic inflows and the surge in artificial intelligence exposure.

So far in May, overseas traders have sold $11.5 billion of Korean stocks on a net basis, a figure that places them on track for their third‑largest monthly exit ever, following the unprecedented sales in February and March. Bloomberg’s data shows that this outflow has been driven by a mix of portfolio rebalancing and a cautious stance on the country’s high‑growth tech sectors.

Despite the heavy selling, the KOSPI has remained resilient, buoyed by steady local capital inflows and the continued rally in AI‑related shares. Market analysts suggest that the sustained domestic demand may cushion the impact of the overseas exit, but the scale of the outflows signals growing uncertainty among global investors regarding South Korea’s economic outlook and valuation premiums.

The trend underscores a broader shift in foreign portfolio sentiment toward more conservative assets, as investors seek to mitigate risk in an environment of tightening monetary policy and geopolitical tensions. Watching the KOSPI’s reaction to these net losses will be key for market participants navigating the rest of the trading year.