The KOSPI (Korea Composite Stock Price Index) has shown greater volatility than during the period when the war between the United States and Iran intensified. As Samsung Electronics (005930.KS) and SK hynix (000660.KS) account for more than half of the KOSPI's market capitalization, the two companies' share price movements are increasingly determining the direction of the entire market.
According to the financial investment industry on Saturday, the KOSPI's daily average volatility from June 1 to 5 stood at 3.9%. Volatility is a figure indicating how sharply the KOSPI fluctuated during a trading day, representing the ratio of the difference between the index's intraday high and low. This is a high figure considering that the daily average volatility was 3.0% earlier this year.
Volatility expanded even beyond March of this year, when the war between the United States and Iran broke out. The daily average volatility in March was 3.7%, while on June 5, when the KOSPI plunged 5.54% from the previous trading day, the daily average volatility reached 4.0%. Since 1990, instances of this figure exceeding 4.0% have been rare, including the 1997-1998 foreign exchange crisis (5.7%), the 2000 dot-com bubble (4.6%), the 2008 global financial crisis (7.4%), and the 2020 COVID-19 pandemic (4.9%).
Behind the expanded KOSPI volatility is the intensified market concentration centered on Samsung Electronics and SK hynix. As of May 29, the combined market capitalization of Samsung Electronics and SK hynix recorded 50.7% of the KOSPI, surpassing half of the entire market for the first time. Additionally, the influx of short-term funds into semiconductor and related stocks ahead of Nvidia CEO Jensen Huang's visit to Korea was cited as a cause.
However, the securities industry offered the analysis that this is volatility within a bull market and is not directly linked to fundamental issues. Lee Jae-won, a researcher at Yuanta Securities, said, "Doubts about the AI infrastructure investment cycle are still difficult to view as a signal of trend deterioration." He added, "Profit-taking emerged after Broadcom's earnings announcement, but this is more a matter of disappointment over the insufficient scale of the guidance upgrade relative to heightened expectations, rather than a slowdown in AI demand."
