[E-Daily Reporter Park Sun-Yeop ] While the KOSPI struggled to gain momentum as major semiconductor stocks faltered, entertainment, leisure, and banking stocks showed notable strength. Although SamsungElectronics and SK hynix fell in tandem, dragging down the index, small- and mid-cap stocks and some domestic demand and defensive sectors actually rose. This appears to be a sign of a rotation in market funds, with capital previously concentrated in semiconductors shifting to other sectors.
According to the Korea Exchange on the 12th, the KOSPI has fallen 11.80% since the start of the month through the 10th. As SamsungElectronics(005930)and SK hynix(000660)fell 14.67% and 17.74%, respectively, the KOSPI Electrical & Electronics Index—which includes these two stocks—also dropped 16.17%. Based on the closing prices on the 10th, the combined market capitalization weight of these two stocks on the KOSPI reached 52.62%.

The correction in the “top two” semiconductor stocks led to a decline in the index driven by mega-cap stocks. So far this month, the KOSPI 50 Index has fallen 13.50%, and the KOSPI Large-Cap Index has dropped 12.50%. In contrast, the KOSPI Mid-Cap Index fell only 2.69%, while the Small-Cap Index actually rose 0.79%, revealing a clear divergence by market capitalization.
The gap between KOSPI 200 constituents and other stocks was also significant. The KOSPI index, excluding KOSPI 200 constituents, fell by only 2.04% over the same period. Rather than a blanket collapse across the entire market, the sharp decline in mega-cap stocks—including semiconductors—appears to have amplified the index’s drop.
In contrast to semiconductors, entertainment and leisure stocks showed an upward trend. The Entertainment & Culture Index rose 7.78% this month, recording the highest growth rate among KOSPI sectors. This index includes entertainment agencies such as HYBE(352820), as well as casino and leisure stocks like Kangwon Land, Inc.(035250)and Grand Korea Leisure(114090).
Looking at individual stocks, HYBE surged 14.78% during the same period, while Kangwon Land, Inc. and Grand Korea Leisure rose 2.17% and 0.29%, respectively. This is interpreted as investors shifting their focus from large-cap semiconductor stocks to entertainment and leisure stocks that offer expectations of improved earnings or possess individual growth drivers.
Among financial stocks, banking holding companies showed particularly strong performance. The KOSPI 200 Financial Index has risen 6.90% so far this month. KB Financial Group(105560)rose 15.97%, while ShinhanFinancialGroup Co.,Ltd.(055550)(13.99%), HanaFinancialGroupInc.(086790)(12.13%), and WooriFinancialGroup(316140)(8.45%) all posted gains.
However, not all financial stocks rose evenly. The KOSPI Financial Index fell 3.89%, and the Insurance Index also dropped 6.66%. The Securities Index rose only 1.01%, suggesting that rather than a broad sector-wide rally, buying interest was concentrated selectively on bank holding companies and certain securities firms.
The upward trend extended beyond the semiconductor sector to other industries as well. The Textiles & Apparel Index rose 3.48%, with Youngone Corporation(111770)and HANSAE(105630)climbing 19.83% and 12.35%, respectively. The Transportation & Warehousing Index also rose 3.24%, with PanOcean(028670)and HMM(011200)posting gains of 10.88% and 6.07%, respectively.
The Food & Beverage and Tobacco index rose 3.06%, and the Telecommunications index rose 2.08%. Nongshim(004370), ORION(271560), and CJ CheilJedang Corp(097950)rose 6.11%, 3.94%, and 3.19%, respectively, while LG Uplus(032640)and KTCorporation(030200)also rose 6.86% and 2.46%. Even as large-cap semiconductor stocks plummeted, stocks with stable earnings and relatively low price pressures continued to outperform.

Analysts are advising investors to broaden their focus beyond a market overly reliant on semiconductors to sectors that offer both solid earnings and attractive valuations. Yoo Myung-gan, an analyst at MIRAE ASSET SECURITIES, noted that while the KOSPI fell due to concerns over semiconductor market peaks and geopolitical uncertainties, the fundamentals of the domestic stock market remain solid.
“The price-to-earnings ratio (P/E ratio) of the KOSPI, excluding semiconductors, stands at 8.3 times, making it more attractively valued,” Yoo said, adding, “We should prepare for a broad-based market rather than a concentration on specific sectors.” He suggested sectors such as semiconductors, IT hardware, securities, cosmetics, and retail as areas of interest.
There are also analyses suggesting that the business cycle for non-IT manufacturing has passed its trough. Lim Hye-yoon, an analyst at HANWHA INVESTMENT & SECURITIES, stated, “The gap between IT and non-IT sectors is highly likely to narrow, peaking in the first half of the year,” citing the recovery in domestic machinery shipments and private-sector machinery orders, as well as an increase in capital goods imports (excluding semiconductor equipment) as evidence.
Researcher Lim pointed out, “In a ‘K-shaped’ economy where growth is concentrated in IT, the effects of demand recovery are limited, and a stock market heavily weighted toward semiconductors is inevitably exposed to increased volatility.” She went on to explain, “A rebound in non-IT sectors is the best-case scenario for alleviating the semiconductor bias in both the domestic economy and the stock market.”
The second-quarter earnings season is expected to serve as a litmus test for whether the recent broad-based sectoral recovery will continue. Lee Kyung-min, an analyst at DaishinSecurities, forecast strong earnings not only in the semiconductor sector but also in non-semiconductor sectors and export-oriented stocks. The second-quarter export growth rate, excluding semiconductors, was 14.1% quarter-on-quarter, a significant increase from the 4.5% recorded in the first quarter.
Lower earnings expectations for non-semiconductor sectors could also have a positive impact on stock prices. This is because, with market expectations already lowered, actual earnings that exceed forecasts could trigger a stronger market reaction. Analysts suggest that the earnings season could serve as a catalyst for a turnaround in the KOSPI’s sentiment and the spread of sector rotation.
However, some observers believe it is too early to conclude that the recent trend represents a shift in market leadership from semiconductors to non-semiconductor sectors. While this year’s KOSPI net income forecast was revised upward by 24.2 trillion won last week, the IT sector accounted for 23.1 trillion won of that increase. This suggests that, despite the sharp decline in stock prices, the core of earnings expectations still lies with semiconductors and IT.
Ultimately, the rise in non-semiconductor sectors appears to be less about completely replacing the dominance of semiconductors and more about a process of alleviating excessive concentration. If the second-quarter earnings season confirms a recovery in profits not only for banks and consumer goods but also for industrial goods and export-oriented stocks, the scope of rotational trading could widen significantly while the semiconductor sector takes a breather.