▲ Officials of Hana Bank celebrate the Korea Composite Stock Price Index (KOSPI) surpassing the 8,000-point mark at the bank's dealing room in Seoul on May 26, 2026. (Yonhap)
▲ Officials of the Korea Exchange (KRX) celebrate the Korea Composite Stock Price Index (KOSPI) surpassing the 8,000-point mark at the KRX office in Seoul on May 26, 2026. (Yonhap)

(News Focus) KOSPI rally-volatility

(News Focus) KOSPI volatility index rises simultaneously as stock market rallies to record high

By Kim Boram

SEOUL, May 29 (Yonhap) -- Even as the benchmark Korea Composite Stock Price Index (KOSPI) continued its record-breaking rally toward the unprecedented 9,000-point mark, rising volatility is fueling concerns that gains were increasingly concentrated in a handful of heavyweight stocks, bourse data showed Friday.

The KOSPI 200 volatility index, or VKOSPI, stood at 73.95 as of 10:46 a.m., up 3.28 percent from the previous session, according to data from the Korea Exchange. The index has risen sharply for four consecutive sessions since Tuesday.

VKOSPI is the official Korean volatility index and serves as a "fear gauge" measuring the market's expected volatility over the next 30 days based on KOSPI 200 options. Typically, VKOSPI moves in the opposite direction of the KOSPI.

However, VKOSPI has jumped 36 percent from 54 to 73 this month, while the KOSPI has risen more than 27 percent from 6,500 to 8,400 over the same period.

The volatility index climbed as high as 82.23 during intraday trading on May 18, the highest level since March 5, a few days after the United States conducted airstrikes on Iran.

The unusual divergence suggests investors are becoming increasingly cautious even as the benchmark climbs to new highs.

Analysts attributed the unusual parallel movement of the KOSPI and VKOSPI to growing concentration in two large-cap stocks -- Samsung Electronics Co. and SK hynix Inc. -- as well as increased trading in leveraged exchange-traded funds (ETFs).

"KOSPI volatility has widened due to the growing weighting of Samsung Electronics and SK hynix," said Kim Jae-seung, an analyst at Hyundai Motor Securities.

"Since these two companies account for nearly half of the KOSPI, movements in these stocks increasingly drive fluctuations in the broader KOSPI 200," he added.

Samsung Electronics' market capitalization stood at 1,800 trillion won (US$1.2 trillion), accounting for 26.6 percent of total market capitalization, while SK hynix had a market capitalization of 1,600 trillion won, representing 23.9 percent.

Like global artificial intelligence (AI)-related stocks, the two memory chipmakers have experienced heightened volatility due largely to heavy capital expenditures and sensitivity to shifts in economic sentiment.

Analysts said the rapid growth of leveraged products may be amplifying market swings by concentrating investor flows into a narrow group of heavily weighted stocks.

Earlier this week, the Korea Exchange introduced single-stock leveraged ETFs linked to the daily performance of Samsung Electronics or SK hynix, adding momentum to concentrated moves in the broader market.

On Tuesday alone, nearly 2 trillion won flowed into four major single-stock leveraged ETFs.

Although the KOSPI climbed 2.2 percent to a record 8,228.7 that day, only 75 stocks advanced while 826 declined, underscoring how much of the rally has been driven by a small number of large-cap shares.

"Those leveraged products still account for a relatively small share compared with the market capitalization of Samsung Electronics and SK hynix," said Lim Eun-hye, an analyst at Samsung Securities.

"However, given their structure, leveraged products can amplify gains during rallies and deepen losses during downturns."

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