With the KOSPI index surpassing the 4,000 mark and hitting a record high day after day, the KOSPI's average daily turnover this month reached the highest level since then in four months. As the stock market has become more active, investors' rotation of holdings also appears to have intensified.
According to the Korea Exchange (KRX) on Nov. 2, last month's average daily market-cap turnover on the KOSPI was 0.57%. This was the highest in four months since 0.63% in June.
Market-cap turnover refers to the ratio of trading value to total market capitalization. The higher this figure, the more frequently transactions between investors—namely, changes of hands—are interpreted to have occurred.
Last month's turnover was the third highest this year, after June and February (0.58%).
In February, expectations tied to policies of the second Donald Trump administration in the United States flowed in, and sector rotation was active.
In June, with the launch of the Lee Jae-myung administration and the KOSPI recovering the 3,000 mark, rotation of holdings occurred.
After Aug. 4, when disappointment over a tax reform plan sent the KOSPI tumbling, the index stayed in a box range for a while and turnover fell to around 0.4%.
However, last month, as a boom in U.S. big tech provided a lift and the market began to rise centered on domestic semiconductor stocks, sector rotation regained momentum.
On the 30th, when the South Korea–U.S. tariff negotiations were concluded, turnover even climbed to 0.72%.
Meanwhile, with the KOSPI index extending its daily rally and sector rotation continuing, the KOSPI's turnover is also expected to remain elevated.
Lee Kyung-min, a researcher at Daishin Securities Co., said, "With major corporations' earnings announcements in the defense, securities, and pharmaceuticals sectors scheduled, sector rotation will intensify as expectations and results are aligned," adding, "In particular, we recommend focusing on sectors that are undervalued relative to earnings and can respond to rotation."