South Korea's benchmark KOSPI crossed the 6,900 mark during intraday trading, bringing the "7,000 milestone" within reach. However, a simultaneous rise in the volatility index and a sharp increase in short-selling balances are fueling both expectations of further gains and growing caution in the market.
KOSPI Breaks 6,900, Just 63 Points Away from 7,000
According to the Korea Exchange, the KOSPI closed Tuesday at 6,936.99, up 338.12 points, or 5.12%, from the previous session, narrowing the gap to the 7,000 level to just 63.01 points.
As the steep rally continued in a short period, expectations of further gains emerged alongside rising caution in the market. The KOSPI 200 Volatility Index (VKOSPI), dubbed Korea's "fear gauge," reflected this sentiment, surging 1.87 points, or 3.44%, from the previous session to 56.21.
This marks the highest level since November 8 (57.70), just before the two-week U.S.-Iran ceasefire agreement eased tensions in the Middle East.
The VKOSPI measures the market's expected future volatility as reflected in option prices. While it typically rises when the KOSPI plunges, it can also climb during rallies when investor anxiety grows.
The index had spiked to 83.58 during intraday trading on March 5, shortly after the outbreak of the Iran war, before falling below the 50 level. It has turned upward again as the KOSPI recently surpassed its pre-war peak and continued to set record highs.
Short-Selling Balance Tops 20 Trillion Won for First Time, Clear Bets on Decline
Alongside the index's rise, movements betting on a market decline are also becoming visible.
The net short-selling balance on the KOSPI market stood at 20.5083 trillion won on November 27 and 20.3887 trillion won on November 28, exceeding the 20 trillion won threshold for the first time in history.
By individual stock, as of November 28, Hanmi Semiconductor topped the list at 1.9348 trillion won. It was followed by Hyundai Motor (005380.KS) at 1.8863 trillion won, HD Hyundai Heavy Industries at 1.5757 trillion won, LG Energy Solution (373220.KS) at 1.3903 trillion won, Mirae Asset Securities (006800.KS) at 935.7 billion won, POSCO Future M at 769.4 billion won, and SK hynix (000660.KS) at 682.1 billion won.
Short selling is an investment technique in which investors borrow and sell shares they do not own, then buy them back at a lower price to return them when the stock price falls. An increase in the short-selling balance is typically interpreted as a signal that more investors are betting on a decline in stock prices.
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