South Korea’s benchmark KOSPI index has rocketed from 3,000 to over 4,200 in just four months, marking a historic high and reigniting global investor interest. Yet beneath the dazzling headline numbers lies a striking imbalance: only a handful of tech giants are driving the rally, while most stocks — and investors — are being left behind.
Data from June 19, when the KOSPI first crossed 3,000, through its recent surge past 4,000, show that out of 955 listed companies, only 415 posted gains. The remaining 540 were flat or declined, some by as much as 55%. Despite the market’s euphoric tone, the majority of Korean stocks are languishing.
Out of 98 trading sessions during this period, just 34 saw more stocks rise than fall. Sectors tied to domestic demand — such as retail, travel, and construction — have been notably weak. By contrast, Samsung Electronics and SK Hynix, South Korea’s tech powerhouses, have soared 75% and 152%, respectively, accounting for 22% of total trading volume and almost single-handedly propelling the index upward.
“The market never moves uniformly,” said Lee Kyung-min, a researcher at Daishin Securities. “Earlier this year, shipbuilding, defense, and machinery stocks led the rally. Since September, semiconductors and secondary batteries have dominated. Investors need to be selective rather than chase cheap stocks indiscriminately.”
Account data from one brokerage firm show that most of the investors who profited focused on semiconductor or defense-related stocks, while more than half ended up in the red.
The fear of missing out is also fueling riskier behavior. Margin debt has surged by roughly ₩1.2 trillion in recent weeks, pushing total leverage to a record ₩26 trillion (about $19 billion). Analysts warn that heavy borrowing concentrated in a few hot stocks could amplify losses if the market corrects.
While the KOSPI’s break above 4,000 symbolizes the resurgence of South Korea’s capital market and its renewed global appeal, the rally’s narrow breadth tells a more complicated story — one of exuberance at the top and unease beneath the surface.
