While the domestic stock market has been hitting record highs recently, the number of rising stocks has decreased, highlighting a trend of concentration among a few large-cap stocks. Funds are increasingly focused on semiconductors and major tech companies, limiting the overall market's upward momentum.
According to the Korea Exchange, from May 26 to June 5, the average number of rising stocks in the KOSPI was just 210 per day, while declining stocks reached 596. This means over 70% of all stocks fell during this period. The remaining stocks remained flat.
This trend was evident even on days when the KOSPI set new records. On June 1 and 2, the KOSPI closed at 8,700 and 8,800, respectively, marking all-time highs, yet only 155 and 252 stocks rose out of a total of 835.
During the same period, large-cap stocks performed strongly. Samsung Electronics and Samsung Electronics Preferred shares rose by 13.72% and 14.32%, respectively, while LG Electronics surged by 33.96%. The gains in large-cap stocks have driven the index higher.
On May 27, when the KOSPI jumped 2.55%, only 72 stocks rose, whereas on May 22, when the index increased by just 0.41%, 713 stocks gained, indicating a broader buying sentiment. Conversely, on June 4, when the KOSPI fell by 1.84%, the number of rising stocks (400) exceeded that of declining stocks (389), revealing a disparity between index performance and individual stock results.
This concentration trend was also observed in the KOSDAQ market. On June 3, only the telecommunications sector saw slight gains, while all other sectors declined. Only 452 stocks rose, compared to 1,266 that fell. There were seven stocks that hit their upper price limit, while one stock hit its lower limit, showcasing significant disparities among individual stocks.
Market analysts predict that this trend of fund concentration is likely to continue for the time being. Noh Dong-gil, a researcher at Shinhan Investment Corp., stated, "The current concentration in the market cannot be explained solely by investor sentiment. Samsung Electronics and SK Hynix have established themselves as common underlying assets in the commodity market beyond just leading stocks."
He added, "As these two stocks rise, their weight in the KOSPI increases, and their importance in related products grows, creating a self-reinforcing structure. For non-semiconductor sectors to become leading stocks, we need to see upward revisions in earnings per share (EPS), liquidity in large-cap stocks, trading volume, and confirmation of foreign and institutional demand, as well as commercialization potential simultaneously."
* This article has been translated by AI.
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