One month into the war between the United States and Israel against Iran, the combined market capitalization of South Korea's stock markets has dropped by nearly 700 trillion won ($515 billion). More than 300 trillion won evaporated from just two semiconductor heavyweights — Samsung Electronics (005930.KS) and SK hynix (000660.KS) — over the past month alone.
According to the Korea Exchange (KRX), the combined market capitalization of the KOSPI and KOSDAQ stood at 5,114.98 trillion won as of the 27th. That represents a decline of 686.70 trillion won from 5,801.67 trillion won on the 27th of the previous month, just before the war began.
The KOSPI's market capitalization reached 5,146.37 trillion won at the end of last month but has since shrunk to 4,482.73 trillion won, a decrease of approximately 663.64 trillion won. The KOSDAQ's market cap also fell by about 23 trillion won, from 655.30 trillion won to 632.25 trillion won.
At the end of last year, the combined KOSPI and KOSDAQ market capitalization was below 4,000 trillion won. A strong rally from the first trading day of this year ushered in an era of 4,000 trillion won in total market cap for the first time. The rally continued, and on the 4th of last month the combined figure surpassed 5,000 trillion won for the first time.
By the 26th of last month — just before the Iran war broke out — the combined market cap had swelled to 5,852.43 trillion won. However, market turmoil this month has erased a significant portion of those gains.
The war period brought extreme volatility, with hundreds of trillions of won appearing and disappearing in a single day. On the 3rd, when the KOSPI plunged more than 7%, its market cap dropped by 376.94 trillion won in one day, from 5,146.37 trillion won to 4,769.43 trillion won. The following day, when prices crashed more than 12%, a staggering 574.49 trillion won was wiped out.
A rebound of more than 9% on the 5th then added 409 trillion won in market cap in a single session, illustrating the wild daily swings. Analysts say the poor performance of bellwether stocks during the war period contributed significantly to the sharp decline in overall market capitalization.
Samsung Electronics, the largest stock on the Korean market, saw its market cap fall by 217.84 trillion won, from 1,281.60 trillion won at the end of last month to 1,063.76 trillion won. Over the same period, SK hynix's market cap declined by approximately 99 trillion won, from 756.18 trillion won to 657.11 trillion won. The combined market cap loss from these two stocks alone reached 316.91 trillion won, accounting for roughly half of the total decline.
Hyundai Motor (005380.KS), the third-largest stock by market cap, also shrank by approximately 36.65 trillion won, from 138.01 trillion won at the end of last month to 105.36 trillion won. LG Energy Solution (373220.KS), ranked fourth, saw its market cap contract by about 7.6 trillion won, from 99.92 trillion won to 92.31 trillion won.
