KOSPI large-cap stocks fell 30.20% during the July 1-28 period, with the Large Cap Index declining from 9421.19 to 6575.65 points, according to Korea Exchange data released July 29. The top 10 stocks by market capitalization averaged a decline of 24.89%, with eight of the ten posting losses during the period. The sharp downturn has challenged the traditional market perception that large-cap stocks serve as safe havens during volatile periods, as their decline rate exceeded the broader KOSPI Index's 28.94% drop by 1.26 percentage points.
KOSPI Large Cap Index Falls 30.20% in July 1-28 Period
The KOSPI Large Cap Index recorded a 30.20% decline during July 1-28, falling from 9421.19 to 6575.65 points. This decline rate was 1.26 percentage points higher than the KOSPI Index's 28.94% drop (8476.48→6023.66) over the same period.
In comparison, the KOSPI Mid Cap Index fell 12.47% (4161.51→3642.53) and the KOSPI Small Cap Index declined 5.64% (2299.17→2169.59) during the same timeframe, highlighting the disproportionate weakness in large-cap stocks.
Samsung Electro-Mechanics and SK Square Lead Declines Among Top Stocks
Among the top 10 stocks by market capitalization, eight recorded losses during July 1-28, with an average decline of 24.89%. Samsung Electro-Mechanics posted the steepest drop at 48.99%, followed by SK Square at 45.49%.
SK Hynix fell 41.51% from 2.65 million won to 1.55 million won, while Samsung Electronics declined 34.13% from 334,000 won to 220,000 won. Other notable declines included Samsung Life (28.93%), Hyundai Motor (26.46%), Samsung Electronics preferred shares (25.38%), and LG Energy Solution (13.26%).
Only two stocks among the top 10 posted gains: Samsung BioLogics rose 11.36% and KB Financial increased 3.90%.
This performance contrasts sharply with the first half results, when Samsung Electronics surged 178.57% (from 119,900 won to 334,000 won as of June 30) and SK Hynix jumped 307.07% (from 651,000 won to 2.65 million won).
Traditional Large-Cap Safety Perception Faces Market Test
Market participants have traditionally viewed large-cap stocks as more stable than small-cap stocks. Companies with larger market capitalizations typically demonstrate stronger earnings and financial structures, and benefit from concentrated institutional and foreign investor demand, which provides relatively stronger price support.
However, with five of the top 10 stocks by market cap experiencing decline rates exceeding the broader KOSPI Index drop, analysts note that large-cap stocks are leading the market weakness. The approach of selecting large-cap stocks to reduce volatility exposure appears less effective in the current market environment.
Industry Analysts Note Breakdown in Blue-Chip Formula
An industry official stated: "As market volatility increased in July, cracks are appearing in the formula that 'large-cap stocks are safe.' The fact that investors who selected large-cap stocks to build stable portfolios are also experiencing volatility confirms that large-cap stocks are not free from market risk."
Financial Sector Observers Report Shift Toward Bank Deposits
Industry observers anticipate an acceleration of the "reverse money move" phenomenon, where funds that had flowed into the stock market return to traditional safe assets such as bank savings and time deposits. As market volatility expands, the appeal of deposits with minimal principal loss risk increases.
A financial sector official commented: "As even KOSPI large-cap stocks collapsed helplessly, the perception that bank savings and deposits are the true safe assets is spreading among investors. Funds prioritizing stability over high returns are flowing in."
FAQ
Q: How much did KOSPI large-cap stocks decline during July 1-28?
A: The KOSPI Large Cap Index fell 30.20% during July 1-28, declining from 9421.19 to 6575.65 points. This decline rate exceeded the broader KOSPI Index's 28.94% drop by 1.26 percentage points.
Q: Which top market-cap stocks posted the largest declines in July?
A: Among the top 10 stocks by market capitalization, Samsung Electro-Mechanics recorded the steepest decline at 48.99%, followed by SK Square at 45.49%. SK Hynix fell 41.51% and Samsung Electronics declined 34.13% during the July 1-28 period.
Q: Why are industry observers discussing a shift to bank deposits?
A: Industry observers note that as market volatility expands and even large-cap stocks experience significant declines, investors are increasingly viewing bank savings and time deposits as safer alternatives. Financial sector officials report that funds prioritizing stability over high returns are flowing into traditional deposit products.
