The day after SK hynix overtook Samsung Electronics' common shares in market capitalization for the first time, the KOSPI plunged nearly 10%, drawing renewed attention to a related report from a month ago. Lee Jae-man, a researcher at Hana Securities who had mentioned in that report that SK hynix surpassing Samsung Electronics' market cap was one of the signals of a bull market ending, said, "It is a short-term overheating signal, but it is hard to see it as the end of the bull market."

On the 23rd, the closing price of SK hynix is displayed on the electronic board at the dealing room of the Hana Bank headquarters in Jung-gu, Seoul./Courtesy of News1

According to the Korea Exchange (KRX) on the 24th, the KOSPI finished trading at 8,204.06, down 9.99% from the previous session. A circuit breaker was triggered during the session. Samsung Electronics and SK hynix, which had led the recent market rise, also plunged 12.31% and 12.47%, respectively.

Earlier, on the 22nd, SK hynix closed with a market capitalization of 2,080 trillion won, surpassing for the first time the market capitalization of Samsung Electronics' common shares (2,066 trillion won). As a result, the phrase from Lee's report last month — "If SK hynix's market capitalization overtakes Samsung Electronics, that is another signal of a bull market ending" — is drawing attention again.

In a call with this newspaper, Lee said, "There are a great many signals for an ending," and "One of those signals was SK hynix overtaking Samsung Electronics."

Lee explained, "I thought it was a short-term overheating signal when SK hynix, with a slightly smaller profit scale, exceeds Samsung Electronics in market capitalization," adding, "When that pattern appears, I thought the index could undergo a correction."

However, he drew a line at interpreting it as the end of the bull market, calling that excessive.

Lee said, "It would be difficult to say the bull market has ended," adding, "It is still hard to find data showing semiconductor profits will turn down." He added, "I see it as roughly a short-term correction signal."

Regarding the sharp drop the previous day in particular, he said, "A 10% decline is closer to near-panic selling than to overheating relief," and assessed, "Price adjustments may settle to some extent, but to create a rebound, we need an earnings trigger."

Lee also predicted that semiconductor earnings will determine the market's direction ahead. He said, "To break out of a time correction, in the end, we have to prove it with earnings," adding, "Earnings announcements by major semiconductor companies such as Micron and Samsung Electronics will be important."

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