SK Hynix Nears Samsung's Market Cap; Will a 'Second Earnings Rally' Ignite Further Gains?

South Korea's stock market is witnessing a significant shift as SK Hynix's market capitalization surges, rapidly closing the gap with industry giant Samsung Electronics. At the end of last week, SK Hynix's market cap reached 95.2% of Samsung's, a dramatic increase from just 51.1% a year prior. This surge is fueling speculation about a potential major upheaval in the KOSPI index.

The SK Group's overall market presence is also expanding, with its 19 listed companies accounting for 34.46% of South Korea's total stock market value. This figure is only about 400 billion won behind the 18 listed companies of the Samsung Group. Both conglomerates are benefiting from an unprecedented boom in the semiconductor industry, but SK Hynix's growth is particularly notable, driven by expectations of price increases for High Bandwidth Memory (HBM) and its U.S. ADR listing.

As the second quarter earnings season approaches, the semiconductor sector is poised for what analysts are calling a "second earnings rally." The results of Micron Technology, scheduled for release on June 25, are being closely watched as a potential indicator for the sector. While some analysts predict a return to a fundamentals-driven market, they caution that limited market liquidity in the later stages of a bull run might hinder the spread of positive sentiment to other sectors beyond semiconductors.

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With short-term negative factors like Fed Chair Kevin Warsh's debut resolved, the market's focus is expected to return to strong fundamentals. However, as the bull market enters its later stages, limited market liquidity will make it even harder for positive sentiment to spread to other sectors.