[Edaily Reporter Park Sun-Yeop ] While the likelihood of a further sharp decline in the KOSPI has diminished, forecasts suggest that a prolonged correction may continue for the time being rather than a rapid rebound in the index. Analysts note that since the recent decline stemmed from a unwinding of supply-and-demand pressures concentrated on a few semiconductor stocks—such as SamsungElectronics(005930)and SK hynix(000660) —rather than a deterioration in the economy or corporate earnings, it will take time for the market to regain stability.
Heo Jae-hwan, an analyst at EUGENE INVESTMENT & SECURITIES, stated in a report on the 13th, “The KOSPI fell 20.5% from 9,114 during intraday trading on the 19th of last month to 7,246 on the 8th of this month,” adding, “As it has reached the average correction level seen since the onset of COVID-19, the downward trend is expected to subside.”

He assessed that it is difficult to attribute the recent stock market plunge to damage to the domestic economy or corporate fundamentals. This is because, with the exception of domestic semiconductor stocks and the Philadelphia Semiconductor Index, no large-scale corrections have occurred across global stock markets overall. However, he noted that it is too early to conclude that the concentration on semiconductor stocks—which intensified during the bull market—has been completely resolved.
The high dependence on a small number of stocks was cited as the reason why volatility in the domestic stock market has widened significantly more than in major overseas markets this year. The standard deviation of daily price fluctuations for SamsungElectronics and SK hynix reached 4.9% and 5.6%, respectively. Even in Japan and Taiwan, where semiconductor stocks were highly volatile, overall market volatility remained in the 1–2% range, whereas volatility in the domestic stock market was more than double that of Japan and Taiwan.
In particular, SamsungElectronics and SK hynix accounted for 78.3% of the KOSPI’s gains in the first half of this year. Taiwan’s TSMC contributed 38.9% to its market’s rise, while Japan’s Kioxia and SoftBank combined for 36.8%. Even the seven major U.S. tech stocks contributed only 13.4% to their respective markets’ gains.
The combined market capitalization share of these two semiconductor stocks on the KOSPI briefly soared to 58% on the 25th of last month. This contrasts with the Taiwanese stock market, where TSMC’s weighting is high at about 42% but has not changed significantly since the beginning of the year, and with the U.S. market, where the combined weighting of the seven major tech stocks has fluctuated between 32% and 37%. This suggests that as the domestic stock market rose sharply, driven primarily by a handful of semiconductor stocks, the downside risk to the index also increased.
The decline in dividend yields—which typically serve as a safety net for the market—due to the sharp rise in stock prices has also contributed to increased volatility. The KOSPI’s dividend yield has fallen from 2.1% in July of last year to 0.8% this month. This implies that even if stock prices drop significantly, the inflow of long-term capital attracted by dividend appeal may be smaller than in the past.
Researcher Heo predicted that rather than the KOSPI recovering to its previous high in the short term, it would undergo a period of consolidation, during which the extreme concentration on semiconductor stocks would ease. While the KOSPI—excluding SamsungElectronics and SK hynix—is estimated to remain below the 4,000 mark, he assessed that the relative underperformance of other sectors is gradually easing as semiconductor stocks have recently experienced steeper declines.
Valuation pressures have also eased considerably. The KOSPI’s 12-month forward price-to-earnings ratio (P/E ratio) has fallen to 6–7 times, the lowest level since the global financial crisis. The forward P/E ratios for SamsungElectronics and SK hynix have dropped to 4–5 times, and the forward P/E ratio for KOSPI sectors excluding these two stocks has returned to 8.6 times, a level seen before April of last year. This suggests that not only semiconductors but also other sectors have become more attractively priced.
By sector, information technology (IT) hardware, semiconductors, IT consumer electronics, machinery, and shipbuilding have seen the sharpest declines since their peaks on the 21st of last month. In contrast, consumer-related stocks and bank stocks have shown relatively steady performance.
Researcher Heo stated, “While the domestic stock market enters a period of correction, it is necessary to gradually increase exposure to additional sectors alongside semiconductors,” adding, “Investors should pay attention not only to semiconductors but also to machinery and shipbuilding—which experienced sharp corrections—as well as consumer and banking stocks, which have remained relatively stable.”