South Korea's KOSPI Decouples from S&P 500, Tracks Semiconductor Index Instead

According to Herald Economics analysis on July 16, South Korea's KOSPI index has decoupled from the U.S. S&P 500, with their monthly correlation coefficient dropping to just 0.025 as of this month, down from 0.5 in February. Conversely, KOSPI moves in sync with the Philadelphia Semiconductor Index.

The divergence stems from KOSPI's concentrated structure, with Samsung Electronics and SK Hynix comprising 52.3% of total market capitalization. In contrast, the S&P 500's top 10 holdings account for only 40% of the index. This month, both the Philadelphia Semiconductor Index and KOSPI have fallen 13.36% and 14.06% respectively, reinforcing their parallel movement.