[Anchor]

Driven by strong semiconductor exports, South Korea's current account surplus reached an all-time monthly high in May. However, the domestic stock market continued to slide sharply due to concerns over a peak in the semiconductor cycle and rising 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 recorded a surplus of 38.61 billion dollars, breaking the record for the highest monthly surplus in just two months.

The primary driver was a surge in exports, which rose by more than 60 percent, fueled 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 total annual current account surplus from last year, which was the highest on record.

[Interview] Yoo Sung-wook / Director of Balance of Payments Statistics Team, Bank of Korea: We had projected a surplus of around 151.5 billion dollars for the first half of the year, but it seems we will exceed that forecast. If that happens, the annual total could potentially be even higher.

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 sidecar measures—which temporarily suspend the execution of program sell orders—and closed with a plunge of over 5 percent.

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

Analysts suggest that concerns over whether the memory semiconductor market has peaked have not subsided, and renewed tensions between the United States and Iran have frozen investor sentiment.

[Interview] Kim Jae-seung / Analyst at Hyundai Motor Securities: There seems to be concern regarding the diminishing profit momentum. Furthermore, the big tech clients investing in AI are issuing a significant amount of bonds. The fact that they are raising capital through stock issuance or funding itself is raising concerns about whether they can continue to invest at this pace.

In the short term, the listing of SK Hynix's American Depositary Receipts (ADR) in the U.S., scheduled for the 10th, 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 could accelerate the exodus of foreign investors.

Reported by Kang Dong-cheol | Video by Lee Seung-jin | Graphics by Lee Jun-ho