Analysts expect South Korean stocks to enter a volatile consolidation period in the next one to two months.

Golden Ten Data reported on June 5 that after a period of world-leading strong gains, South Korea’s $4.9 trillion stock market has begun to show signs of pressure. On the very day the South Korean KOSPI index reached a record high on Tuesday, only 2.6% of stocks touched a 52-week high, while as many as 31% of stocks fell to a 52-week low. Retail investors’ enthusiasm is also starting to cool, and at the same time, surging margin loans now face the risk of a possible interest rate hike by the Bank of Korea in July. As various risks continue to accumulate, investors are warning that if the market turns downward, the speed of the decline could match the previous rapid rise. “For now, compared to a deterioration in fundamentals, I am more concerned about signs of overheating in market positioning,” said Ha Seok Keun, Chief Investment Officer at South Korea’s Eugene Asset Management, “I expect that in the next one to two months, the market will enter a period of intensified volatility accompanied by consolidation.”