The benchmark KOSPI stopped a six-day slide Tuesday as the two Koreas reached a military agreement. It gained 16.82 points, or 0.92 percent, from the previous trading session to close at 1,846.63.

However, foreign investors were still net-selling on local main bourse after major stock markets of Europe and the U.S. tumbled overnight.

The Chinese market’s further plunge on Tuesday is estimated to have stifled the rebound of South Korean stocks.

Foreigners net-sold equities worth 528.6 billion won ($444.2 billion) with their collective net-selling exceeding 2 trillion won over the past 14 trading sessions since Aug. 5.

The U.S. and some major European bourses underwent drops between 3.5 percent and 4.7 percent overnight amid weak economic indexes in China and growing worries over the possibility of global deflation.

Shares on the Shanghai Stock Exchange fell for the fourth consecutive session. Its index lost about 1,000 points in about a month to dip below 3,100, compared to 4,123.92 on July 23. It peaked at 5,178.19 on June 12.

Some research analysts, however, downplayed foreigners’ massive net-selling on the Korea Exchange, citing their aggressive betting on futures trading.

Foreigners net-purchased 18,914 futures contracts in Monday trading, a daily record that topped the previous peak of 16,726 contracts on Sept. 27, 2006. Their net-buying continued on Tuesday.

The secondary KOSDAQ rose 32.1 points, or 5.23 percent, from a session before to close at 645.43.

On the foreign exchange market, the Korean won further lost ground to the Japanese currency that closed above 1,000 won per 100 yen for the first time in about 10 months.

The Japanese currency rose by 6.78 won, or 0.68 percent, to close at 1,004.54 won per 100 yen.

“The currency market is showing the trend of hedging risks, which is linked to strong position of the (relatively safe assets) yen and dollar,” said Korean Exchange Bank’s senior researcher Suh Jung-hoon.

The U.S. dollar and the euro recently surpassed the 1,190 won and 1,370 won mark, respectively.

Analysts say that Chinese monetary policymakers’ devaluation of the yuan has fueled the weakness of the won, citing the Korean economy’s growing dependence on China.

By Kim Yon-se (kys@heraldcorp.com)