South Korea's Kospi hits record high as a few stocks dominate gains in May 2023
South Korea’s Kospi index saw dramatic shifts in May 2023. While the benchmark surged by over 28 percent during the month, most individual stocks actually fell. This unusual split highlights how a small group of major companies drove the market’s gains to new heights. The Kospi closed at a record high of 8,476.15 on May 26, 2023. This capped a month where the index jumped 24 percent, with earnings adding 8.5 percentage points to that rise. Another 15.5 percentage points came from an increase in the price-to-earnings ratio, reflecting higher investor confidence in future profits.
Year-to-date, the Kospi had already climbed 94.2 percent by the end of May, with earnings alone contributing 126 percentage points to that growth. Yet beneath the surface, only 111 of the 948 listed stocks advanced in May, while 811 declined. The electrical and electronics sector was the sole industry to outperform the broader index. Large-cap semiconductor stocks and power-related shares led the charge, lifting the market even as most companies struggled. Analysts have warned that this narrow focus could lead to greater volatility in the coming months.
The Kospi’s record run in May 2023 relied heavily on a handful of major stocks. With most shares falling while the index soared, the gap between winners and losers has widened. This concentration of gains may now pose risks for broader market stability.
