Domestic Market Briefing — 2026-05-31

Today’s Index Status

As of May 31, the KOSPI closed at a record high of 8,476.15. However, this strength is heavily driven by capital concentration in AI semiconductor names like Samsung Electronics and SK Hynix. In fact, 82% of the 2,764 listed stocks have fallen over the past month.

Supply and Demand by Investor

• Foreigners: Recorded a record-breaking 44.7 trillion won in net selling on the KOSPI in May, primarily offloading SK Hynix and Samsung Electronics. Conversely, they net bought 2.84 trillion won on the KOSDAQ, signaling a move to trim positions in an overheated market.

• Institutions: Remained the primary buyers, offsetting foreign selling and defending the index, bolstered by the National Pension Service and long-term capital inflows.

• Retail: Net bought roughly 3.6 trillion won, focusing on small-to-mid-cap stocks and tech.

Top Stocks Today

Top Gainers

Samsung Electronics — Hit a record high driven by surging demand for AI chips and institutional buying. Demand for DRAM and V-NAND remains solid due to increased global AI server investment.

SK Hynix — Continued strength due to persistent supply shortages in high-end memory chips, supported by institutional buying despite heavy foreign selling.

Semiconductor ETFs — Newly listed semiconductor ETFs are seeing high demand amid the ongoing chip industry rally.

Top Decliners

Small/Mid-cap Manufacturers & Non-IT — 82% of listed stocks fell this month as capital focused exclusively on AI chip majors, deepening market polarization.

Energy & Refining — Oil price gains are limited by signs of easing Middle East tensions, putting pressure on related stocks.

Sector Trends

Strong: Semiconductors/Electronic Components (+24%), Telecom & IT Services (+12%).

Weak: Basic Chemicals/Energy (-12%), Construction/Automotive (-0.51%).

Key Issues

Record May Foreign Net Selling (44.7 Trillion Won)

Foreigners sold a record 44.7 trillion won (approx. $30 billion) worth of KOSPI stocks in May, mostly profit-taking on large caps. This is seen as a move to reduce exposure to an overheated market, though it has been balanced by local buying.

Record Index, But 82% of Stocks Fell

Despite the KOSPI hitting 8,476.15, 82.34% of stocks have declined. The market is becoming overly dependent on a few mega-cap AI/platform firms, raising concerns about market health and the need for more diversified investment strategies.

Oil Weakness on Easing Middle East Tensions

Talks between the US and Iran are nearing an end, reducing geopolitical risk and keeping oil prices in the low $70s. This hits energy stocks but could improve refining margins.

Macro Factors

• Exchange Rate (KRW/USD): Early 1,200s.
• Government Bond Yield (3-year): 3.0~3.2%, showing a downward trend.
• Oil (WTI): $70~71 per barrel.
• Global Markets: US futures are slightly soft; Japan's TOPIX hit a record high.

Tomorrow’s Checkpoints

• June 1: US May employment data release.
• Foreign Direction: Monitoring for a shift to net buying in early June.
• AI Chip Demand: Tracking spot prices for memory semiconductors.

Expert Commentary

Seo Sang-young (Mirae Asset Securities): "The Korean market remains undervalued at 9x annual earnings, suggesting long-term value, though short-term volatility from arbitrage trading is expected."

Korea Herald Analysis: "The record selling in May reflects profit-taking and a decline in the attractiveness of non-mega-cap stocks; a shift toward diversified investment in June is necessary."