South Korean markets have turned into a roller coaster ahead of Nvidia CEO Jensen Huang's visit to Seoul, with large-cap stocks worth tens of trillions of won swinging like Kosdaq theme plays. LG Electronics and Doosan Robotics hit their daily upper limit, while Naver and LG CNS surged by double digits — yet the rally failed to spread across the broader market. Even as the Kospi broke through the 9,000-point barrier, gains remained concentrated in a handful of stocks while the majority declined, deepening concerns about extreme volatility.
Korea Exchange data show that stocks grouped as "Jensen Huang beneficiaries" surged in unison in the previous session on Monday. LG Electronics soared 30 percent, hitting its daily price limit, while LG CNS jumped 26.27 percent and LG Corp climbed 13.10 percent. Naver rose 16.03 percent. Doosan Robotics also hit its upper limit, and Doosan, the group's holding company, closed up 11.71 percent. SK Telecom, which Huang named as a key partner, gained 11.53 percent.
The mood reversed sharply within a single day. LG Electronics, which had hit its upper limit on Monday, was trading at 336,500 won — down 44,000 won (about $29), or 11.56 percent — as of 10 a.m. Tuesday. Naver fell 22,000 won, or 8.10 percent, to 249,500 won. Other Monday winners turned lower in unison: LG CNS dropped 12.73 percent, LG Corp fell 17.19 percent and Doosan slid 11.39 percent. The abrupt reversal in blue chips that had surged on expectations led observers to say that even large-cap stocks were now exhibiting the kind of volatility normally associated with Kosdaq theme plays.
By the afternoon, major stocks including LG Electronics and Naver swung back into positive territory, adding another layer of dizzying volatility. It is rare for LG Electronics, with a market capitalization exceeding 60 trillion won, and Naver, valued in the 40 trillion won range, to post double-digit swings within a single trading day.
Market participants attributed the turbulence to investor excitement over Huang's planned visit and the prospect of a series of meetings with the heads of South Korea's major conglomerates. Industry sources say Huang is scheduled to arrive in Seoul on Friday and meet with LG Group Chairman Koo Kwang-mo, SK Group Chairman Chey Tae-won and Naver board chairman Lee Hae-jin. Reports that Huang might also throw the ceremonial first pitch at a Doosan Bears baseball game added to the buying frenzy in related stocks.
Investors were also emboldened by memories of last year's so-called "Ganbu meeting" — a high-profile encounter between Huang, Samsung Electronics Chairman Lee Jae-yong and Hyundai Motor Group Executive Chair Euisun Chung — after which shares of Samsung Electronics and Hyundai Motor strengthened.
Some market observers warn, however, that recent share price moves are overly dependent on expectations. No concrete disclosures — such as new orders or supply agreements with Nvidia — have been confirmed, yet large-cap stocks have repeatedly hit their daily upper limits or posted double-digit gains on little more than hopes of cooperation with the chipmaker.
What stands out in this rally is the sheer scale of the moves among blue chips. Analysts describe the recent surge as extraordinary given the size of LG Electronics, whose market capitalization exceeds 60 trillion won, and Naver, valued in the 40 trillion won range. Hitting the daily price limit in a single session has traditionally been the domain of small- and mid-cap Kosdaq stocks. Yet large-cap names are now reacting sharply to specific catalysts, behaving more like theme plays.
Despite the headline-grabbing gains, the broader market mood remains cold. Capital is concentrating in a handful of large caps and select themes, widening the gap between winners and losers. The divergence is visible in the data. The Kospi closed Monday up 3.68 percent at 8,788.38, setting an all-time high. But beneath the surface, only 179 stocks on the Kospi advanced while 732 declined. The Kosdaq told an even starker story: just 224 stocks rose while 1,478 fell.
The advance-decline ratio stood at 47.94 percent on the Kospi and 47.62 percent on the Kosdaq. The Kospi ADR falling into the 40 percent range has not occurred since March 2020, the early days of the COVID-19 pandemic, when the index plunged from around the 2,100 level at the start of that year to the mid-1,400s. The difference now is that it is happening while the index sets all-time highs.
The divergence signals a widening gap between what the index shows and what most investors are actually experiencing. Even in the era of Kospi 9,000, the polarization within the market is intensifying.
Analysts say the funds driving the recent rally are concentrated in semiconductor and AI-related large caps as well as leveraged ETFs tied to Samsung Electronics and SK Hynix, deepening the divide between stocks. As recently as April, gains among large caps had been accompanied by a gradual warming in small- and mid-cap names. More recently, however, a clear decoupling has emerged: large caps surge while smaller stocks pull back. Sentiment is cooling rapidly among companies with weak earnings fundamentals and high sensitivity to rising interest rates, analysts said, further widening the internal divide.
Investment industry analysts say that news of high-profile meetings and expectations of AI cooperation can provide a short-term boost to investor sentiment, but whether the share price gains will last remains to be seen.
"In the short term it can affect share prices, but the sustainability remains to be seen," said Kim Min-ki, a research fellow at the Korea Capital Market Institute. "Compared with information companies provide directly — such as corporate disclosures or earnings — the lasting impact may be relatively limited."
hajun825@heraldcorp.com
