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US and South Korean equities bottom-fishing capital flows: retail investors add positions against the trend AI equities; JPMorgan says room for further downside may narrow
According to BlockBeats,October 23, global equity markets experienced a new wave of selling, and market concerns over AI capital expenditure and investment returns intensified again, while Middle East developments and rising oil prices also weighed on risk appetite. Data from the Korea Financial Investment Association show that October 21 the amount of forced stock sales was 12900000000 KRW, below the previous day's 22600000000 KRW; previously October 13 to 19, for a consecutive 5 trading days, daily forced sales exceeded 50000000000 KRW. Meanwhile, the credit-financing balance fell to 30271000000000 KRW, and investor deposits fell to 89634300000000 KRW, marking the first time in about 9 months that it fell below 90000000000000 KRW.
South Korean chip stocks saw foreign investor buying return. As of October 21, foreign investors had been net buyers of Samsung Electronics for 4 consecutive trading days, totaling 1324700000000 KRW; they had previously been net sellers for 12 consecutive trading days, selling approximately 7800000000000 KRW.SK SK Hynix, after foreign investors had been net sellers for 18 consecutive trading days, turned into a net purchase of October 21 KRW on 200600000000. However, analysts cautioned that this change cannot yet be regarded as an improvement in trend-based capital flows.
In the US market, JPMorgan strategist Arun Jain tracked October 15 to 21 trading flows and found that retail investors increased purchases of semiconductor, new-cloud, and storage companies, with purchases of individual technology stocks reaching July the highest level since the momentum-trade reversal; the most bought names were SanDisk, TSMC, and Nebius. Technology ETF weekly fund inflows reached the second-highest level in history, while October 16 single-day inflows set a record.
Institutional positioning, meanwhile, showed crowded shorts. Goldman Sachs prime brokerage data show that the ratio of equity short-selling volume to long-buying volume was approximately 5 to 1, and short leverage in client books was at the 5 th percentile over the past 99 years. Net leverage among fundamental long-short equity funds was near a 3-year low, though gross leverage increased. Goldman Sachs warned that if a catalyst drives technology stocks higher, crowded shorts could be forced to cover, creating a potential short-squeeze risk.
On whether the market is nearing a bottom-fishing window, JPMorgan strategist Nikolaos Panigirtzoglou and his team believe hedge funds have substantially reduced equity risk exposure. After some funds that had previously driven gains withdrew, the room for the market to be further hit by concentrated selling may narrow. The team views semiconductors as an important barometer of fund risk exposure, but also noted that AI investment returns, financing pressure, and position concentration remain risks; easing selling pressure does not mean the market has bottomed.