The KOSPI index has surpassed the 9,000 mark for the first time, fueling optimism for a potential rise to 10,000. However, internal market conditions are showing increased volatility. The heightened expectations for earnings, particularly in the semiconductor sector, have led to growing caution among investors.
On June 22, the KOSPI closed at 9,114.55, up 62.13 points (0.69%) from the previous trading day. The index started the day at a low of 8,954.43 but quickly recovered, even reaching 9,200 during trading before closing above 9,100.
Despite the index's rise, the overall sentiment is not entirely optimistic. The KOSPI 200 Volatility Index (VKOSPI) recorded a significant increase of 4.54%, reaching 87.36 on the same day.
The VKOSPI measures the expected volatility of the market as reflected in option prices. Typically, this index rises during market downturns, but it can remain elevated even in bullish markets if uncertainty about future direction increases. This explains why the volatility index has not calmed despite the KOSPI reaching record highs recently.
In fact, over the past week, the VKOSPI has remained above 80, except for June 17, when it recorded 79.65. It reached 87.75 on June 15, followed by 84.29 on June 16, 80.25 on June 18, and 83.57 on June 19. This indicates that while the index is climbing, investor anxiety is also on the rise.
Analysts attribute the recent increase in volatility to the extreme concentration in the semiconductor sector and the rising expectations for earnings. The focus on semiconductor stocks, driven by expectations of benefits from increased investment in artificial intelligence (AI), has propelled the market upward, but there are concerns that these expectations may be overly ambitious.
Lee Jae-man, a researcher at Hana Securities, noted, "The extremely high profit growth rates we are currently experiencing, which have not been seen in the past, can create expectations. However, actual earnings announcements may fall short of these expectations, raising concerns about reaching the peak of profit growth." Han Ji-young, a researcher at Kiwoom Securities, added, "The concentration on semiconductors and IT hardware is a primary concern in the domestic market. This week, we need to be prepared for price and supply volatility that is unrelated to fundamentals."
In this context, market attention is turning to Micron Technology, a U.S. memory semiconductor company, which is set to announce its third-quarter earnings (covering March to May) on June 24 (local time). Micron is viewed as a barometer for the global memory semiconductor industry, and its results are expected to be a critical indicator of whether the semiconductor rally driving the domestic market will continue. One analyst remarked, "The biggest event this week is Micron's earnings report, which will help determine whether the semiconductor sector can maintain its leadership."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.