The KOSPI reached a record high on May 29 while its volatility index also climbed. The benchmark closed at 8,476.15, up 3.55 percent, and the VKOSPI rose 3.72 percent to 74.26.
The KOSPI 200 volatility index, or VKOSPI, rose 36 percent this month in tandem with the KOSPI. Analysts linked the parallel movement to heavy concentration in Samsung Electronics and SK hynix plus inflows into leveraged ETFs.
Samsung Electronics and SK hynix together account for nearly half the KOSPI market capitalization, with figures of 1,800 trillion won and 1,600 trillion won respectively. Kim Jae-seung of Hyundai Motor Securities said the growing weight of the two stocks has widened KOSPI volatility.
The Korea Exchange launched single-stock leveraged ETFs tied to Samsung Electronics and SK hynix earlier this week. Nearly 2 trillion won flowed into the products on Tuesday alone, yet only 75 stocks advanced that day while 826 declined.
Lim Eun-hye of Samsung Securities noted that the structure of leveraged products can amplify both gains and losses.
