Record Current Account Surplus Fails to Lift Sliding Stock Market

[Anchor]

Driven by a continued boom in the semiconductor industry, South Korea's current account surplus reached an all-time high in May. However, the domestic stock market saw a sharp decline, fueled by concerns that the semiconductor cycle has already peaked and renewed tensions between the United States and Iran.

Reporter Lee Tae-gwon has the story.

[Reporter]

In May of this year, South Korea's current account surplus stood at 38.61 billion dollars, marking a record high just two months after the previous peak.

The primary driver was a surge in exports, which grew by over 60 percent, led by a 167 percent jump in semiconductor exports compared to a year ago.

The cumulative surplus from the beginning of this year through May reached 141.3 billion dollars, already surpassing the annual current account surplus recorded last year, which had been the highest on record.

[Yoo Sung-wook / Director of Balance of Payments Statistics Team, Bank of Korea: We had projected a surplus of about 151.5 billion dollars for the first half of the year, but it seems likely to exceed that forecast, which could lead to an even higher figure for the entire year....]

Despite the news of the record-breaking current account surplus, the domestic stock market continued its sharp decline.

Both the KOSPI and KOSDAQ indices triggered sidecars—a temporary suspension of program trading orders—and closed with drops of over 5 percent.

The KOSDAQ index fell below the 800-point mark for the first time in 10 months.

Analysts suggest that the market sentiment has been frozen by persistent concerns that the memory semiconductor industry may have peaked, coupled with rising tensions between the United States and Iran.

[Kim Jae-seung / Researcher at Hyundai Motor Securities: There seems to be concern regarding the diminishing profit momentum itself, and the big tech clients investing in AI are continuing to issue a significant amount of bonds. The fact that they are raising capital through stock issuance or funding is leading to worries about whether they can sustain such investments....]

In the short term, the listing of SK Hynix's American Depositary Receipts (ADR) scheduled for July 10 and the upcoming earnings reports from major U.S. tech companies are considered key variables for the stock market.

While there are expectations that the SK Hynix ADR listing could help restore domestic investor sentiment, there are also concerns that it might accelerate the exodus of foreign investors.

(Reported by Kang Dong-cheol | Video by Lee Seung-jin | Graphics by Lee Jun-ho)
※ Please note: This article was translated by AI and may contain errors.