As the KOSPI rises by 30%, the electrical and electronic sector soars by 43%, with semiconductors leading the performance in the first half of the year

Last month, although the KOSPI index saw a strong rebound of more than 30%, what actually drove the market was certain industry sector groups with even sharper gains.

According to data from United Infomax on the 3rd, the KOSPI index rose 30.61% over the past month, the highest among major countries’ representative indices. However, judging by the performance across industries, not all sectors achieved a broad-based rally. There were only four sectors that outperformed the KOSPI’s return: electrical & electronics, machinery & equipment, construction, and manufacturing. Of these, electrical & electronics led with a 43.16% gain, followed by machinery & equipment at 40.62%, construction at 37.59%, and manufacturing at 35.18%.

The strong momentum in the electrical & electronics sector is mainly driven by semiconductor blue-chip stocks that represent the domestic stock market. Samsung Electronics rose 31.88% over the past month, and SK Hynix’s gain reached 59.36%. Analysts believe that the semiconductor industry boosted both earnings expectations and investment sentiment, causing capital to flow in concentrated fashion into related sectors. However, even within the same industry, the gains of individual stocks can differ greatly. In the electrical & electronics sector, the best performer, optoelectronics, recorded a cumulative increase of 269.65%.

Among other strong sectors, some individual stocks also posted gains significantly higher than the index average. In the machinery & equipment industry, Hanwha Engine rose 102.07%; in the construction industry, Daewoo Construction gained 125.08%; and in the manufacturing industry, WOO SUNG MATERIALS surged 895.30%, with the most outstanding move. In the same period, the entertainment and culture sector fell 6.76%, and the pharmaceuticals sector declined 1.53%, showing a clear spread in performance between sectors. This indicates that although the overall market rallied sharply, capital was still concentrated in specific sectors and individual stocks with higher earnings expectations.

Market participants believe it remains to be seen whether the April rally led by semiconductors and electrical & electronics can continue into May. Lee Gung-soo, a researcher at Hana Securities, said that recently the pace of upward revisions to semiconductor earnings expectations slowed after earnings reports were released, and the scale of domestic semiconductor ETF funds also shrank, meaning supply-and-demand momentum is weakening. He expects that in May, stocks that outperform the semiconductor sector and deliver excess returns (i.e., alpha returns) may become the new market main theme. He also said that after completing the earnings verification for the first quarter, the sectors where profit expectations improve faster, and where seasonal trading activity warms up, could become the core of sector rotation.

Lee Jung-bin, a researcher at Shinhan Investment Securities, also believes that investors’ focus is shifting toward new leading stocks outside the semiconductor space. He pointed out that IT hardware, power equipment, nuclear power, and the securities industry are among the areas where earnings momentum (earnings improvement expectations) is relatively clearer. It can be seen that the current market is entering a phase focused on which sector will take over the lead, and its importance may even surpass the index’s own sharp surge. Even if the semiconductor rally cools later, this trend may continue—driven by capital rotating toward sectors that have stronger support from earnings and supply-demand fundamentals.