The intraday KOSPI index is displayed on the status board at Hana Bank’s dealing room in Jung-gu, Seoul, on January 7. (Photo provided by Hana Bank)
The KOSPI index surpassed the 4,600 level during trading on Jan. 7, extending its strong performance for the fourth consecutive day this year. While the faster-than-expected rally brings the index closer to the “5,000-pi” milestone, only key export stocks such as semiconductors, shipbuilding, and defense are showing strength, while domestic demand stocks remain sluggish. The stock market is exhibiting a “K-shaped growth” pattern, signaling polarization.
The KOSPI closed at 4,551.06 on the day, up 25.58 points (0.57%) from the previous day, marking its fourth consecutive day of record highs. During intraday trading, it reached as high as 4,611.72, surpassing the “4,600 level.” This was driven by Samsung Electronics’ closing price settling above “140,000 won Electronics” for the first time and SK Hynix rising to “760,000 won Nix” during trading.
The KOSPI has surged 7.99% this year, maintaining its position as the top performer among major global stock indices, following last year’s performance. With only single digits (8.42%) remaining to reach “5,000-pi” from its peak, expectations for achieving “5,000-pi” have heightened.
While the index continues to surge, not all stocks are rising. On this day, 200 KOSPI stocks advanced while 686 declined, with declining stocks outnumbering advancing ones by more than three times. Even over 10 consecutive trading days since December 2023, declining KOSPI stocks outnumbered advancing ones.
The imbalance among stocks stems from “K-shaped growth.” Representative export sectors and domestic key industries such as semiconductors, shipbuilding, and defense have seen stock prices surge amid expectations for future performance, while sectors that import intermediate goods or focus on domestic demand continue to face unfavorable outlooks.
Since last month, when the KOSPI began its steep ascent through January 6, leading stocks including Samsung Electronics (38.21%), SK Hynix (36.98%), and Hanwha Aerospace (19.95%) posted double-digit growth. However, stocks related to domestic demand such as CJ CheilJedang (-1.91%), LG Household & Health Care (-3.62%), and Lotte Shopping (-3.64%), as well as secondary battery and chemical stocks facing poor industry conditions, declined.
Foreign investors have continued buying and selling trends along similar lines. During the same period, foreigners purchased 3.4 trillion won (approximately $2.36 billion) worth of Samsung Electronics (including preferred shares) and SK Hynix stocks, along with major power and defense stocks, but net sold CJ CheilJedang, LG Household & Health Care, and Samsung SDI.
Kang Dae-seung, a researcher at SK Securities, said, “Last year, Korea’s exports surpassed $700 billion, centered on shipbuilding and semiconductors, further expanding the sector-specific concentration phenomenon in the stock market.” He explained that while high exchange rates accelerate performance improvements for leading export stocks, driving rapid stock price gains, domestic demand faces consumption contraction due to high exchange rates and inflation, resulting in lackluster stock performance.
Securities firms forecast that the unbalanced market trend, with only leading stocks showing strength, will continue this year. Yang Hyung-mo, a researcher at DS Investment & Securities, said, “We expect the KOSPI to continue outperforming global stock markets this year,” adding, “This is because last year’s rise was not based on one-off positive factors, but rather on structural profit growth in the four core manufacturing industries: semiconductors, shipbuilding, power, and defense.”
