"My Stocks Keep Falling While the KOSPI Soars... The Hidden Truth Behind the Market Rally"

Samsung Electronics and SK hynix Account for 70% of Gains
A Mirror Image of the 1999 Dot-com Bubble
Abnormal Volatility Hidden Behind Market Optimism

As the KOSPI continues its upward rally, a "distorted solo run" is intensifying, with only a handful of stocks rising while most others are falling. Analysts point out that this extreme concentration in semiconductor-related stocks is becoming structurally entrenched in the market, going beyond simple investor sentiment.

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According to the Korea Exchange on June 10, the average number of rising stocks per day in the KOSPI market last year was 647, more than double the number of declining stocks (288), with most stocks climbing evenly. However, the mood shifted dramatically this year (from January 1 to June 9). Since then, only the index has risen while most individual stocks have fallen, marking the start of a pronounced concentration trend. The average number of rising stocks in the KOSPI dropped by half to 327, while the number of declining stocks surged to 603.

According to LS Securities, the KOSPI rose by 101.1% so far this year, with Samsung Electronics (34.3%) and SK hynix (35.5%) accounting for about 70% of the gains. The combined contribution of all other stocks amounted to just 31.4%.

This concentration has reached its peak this month. The average number of rising stocks per day was just 140, while declining stocks soared to as many as 780. With about 82% of KOSPI-listed stocks in decline, only a tiny minority of stocks are propping up the index on their own. By industry among the rising stocks, there were 17 in retail including Hyundai Department Store (up 51.91% through June 9), 17 in other financials including CJ (11.19%), 16 in chemicals including Foosung (17.87%), 12 in insurance including Mirae Asset Life Insurance (64.29%), and 10 in electrical/electronics including Jusung Engineering (25.79%).

Even when the KOSPI hit record highs and closed in the 8,700–8,800 range on June 1 and 2, only 179 and 271 stocks rose, respectively, while all the rest either fell or remained flat.

This extreme concentration mirrors past historical bubble phases. According to KB Securities, in the second quarter of this year, only the information technology (IT) sector posted returns above the KOSPI benchmark in the Korean stock market. Every other sector, including energy (down 18 percentage points), industrials (down 19 percentage points), and consumer discretionary (down 24 percentage points), trailed the market.

This pattern perfectly mirrors the U.S. stock market during the last year of the dot-com bubble in 1999, when only the IT sector posted a relative return of 56 percentage points above the S&P500, while all other sectors, including consumer discretionary (down 5 percentage points), industrials (down 8 percentage points), and financials (down 17 percentage points), posted negative returns. Historically, the phenomenon of funds concentrating in leading stocks towards the end of a bubble rally is repeating itself.

Experts unanimously advise caution amid rising volatility. Junyoung Kim, a researcher at iM Securities, said, "As optimism spreads across the market, investors are hardly considering downside risks," adding, "FOMO (fear of missing out) regarding certain sectors and stocks has pushed individual stock prices and volatility into abnormal territory." He continued, "Index indicators may suggest nothing is wrong, but volatility at the individual stock level has increased. Once this upward structure reverses, the decline could be uncontrollably steep in a short period."

Jaeseung Kim, a researcher at Hyundai Motor Securities, commented, "While the KOSPI is expected to trend upward in the second half of the year thanks to the semiconductor supercycle, volatility will be greater than ever before." He advised, "If there is a correction of more than -10% without fundamental changes, investors should adopt a stepwise buying approach and avoid aggressive chasing in a bull market, sticking to a conservative strategy."

This content was produced with the assistance of AI translation services.