Korean Stock Market Sheds 212 Trillion Won in Value in a Month

The combined market value of South Korea's stock markets has fallen by more than 210 trillion won over the past month, as heavyweight chip stocks including Samsung Electronics and SK hynix retreated. The combined capitalization of the KOSPI and KOSDAQ, which topped 8,000 trillion won in intraday trading in June, has narrowed to around 6,000 trillion won.

The combined market capitalization of the KOSPI and KOSDAQ stood at 6,022.223 trillion won as of 11:40 a.m. on the 14th, according to the Korea Exchange and Koscom's ETF CHECK. The KOSPI accounted for 5,567.111 trillion won and the KOSDAQ for 455.112 trillion won.

That marks a decline of 212.555 trillion won, or 3.41%, from 6,234.778 trillion won on the 14th of last month. It is down 34.91 trillion won, or 0.58%, from July 14. Compared with June 22, when the KOSPI was climbing toward a record high, the decline reaches 1,971.173 trillion won, or 24.66%.

The market expanded rapidly in the first half of the year. The combined KOSPI and KOSDAQ capitalization passed 6,000 trillion won for the first time on April 27, then broke through 7,000 trillion won just eight trading sessions later on May 11. With chip stocks leading the rally, it also topped 8,000 trillion won in intraday trading in June.

The KOSPI started the year around 4,000 and cleared 5,000 in January and 6,000 in February. The advance stalled amid military tensions in the Middle East, but a chip rally in May carried the index past 7,000 and 8,000, and it reached an all-time intraday high of 9,385.59 in June.

The mood shifted abruptly in July. The KOSPI plunged 22.19% over the month and fell as low as 5,262.77 in intraday trading. It has since recovered much of that ground but has been swinging between 6,000 and 7,000 without clear direction. Market capitalization has correspondingly hovered around 6,000 trillion won.

Samsung Electronics and SK hynix are at the center of the decline. The market value of each company once exceeded 2,000 trillion won, but both have since dropped into the 1,000 trillion won range. Samsung Electronics was valued at 1,482.031 trillion won on the 14th, down 30.1% from the 2,119.275 trillion won it recorded on June 18.

SK hynix stood at 1,263.751 trillion won, down 39.3% from 2,080.378 trillion won on June 22. Together, the two stocks have lost roughly 1,454 trillion won in market value from their peaks.

For the year to date, total market capitalization is still up 2,038.457 trillion won, or 51.17%. But with the market shrinking from 8,000 trillion won just three months ago to the low 6,000 trillion won range, it has given back much of the first-half gain.

The market has been reacting sharply to external variables, including concerns that high interest rates will persist, rising international oil prices, geopolitical uncertainty and a stronger won. When Middle East tensions escalated this spring, expectations for a recovery in the chip industry offset macroeconomic pressure. More recently, however, talk of a slowdown in the artificial intelligence industry has emerged, and chip stocks are adding to downward pressure on the index.

"With an unstable macro environment compounded by talk of a slowdown in AI, the KOSPI is fluctuating around the 6,700 level," said Kang Jin-hyuk, an analyst at Shinhan Investment. "Foreign investors are continuing to sell both spot and futures, and it is worth watching whether net purchases of about 1.6 trillion won by other corporate entities can calm the selloff."