Seoul: The Kospi index has impressively climbed above the 4,500 mark, closing at 4,525.48 on Tuesday, marking an increase of 67.96 points or 1.52 percent from the previous session. This rally, persisting into the opening days of the year, has invigorated liquidity in equities, aligning with the Lee Jae Myung administration's vision of a "Kospi 5,000 era." A buoyant stock market can enhance confidence among households and businesses, potentially adding momentum to the broader economy and easing exchange rate pressures by attracting investment funds back domestically. However, the surge does not necessarily indicate a comprehensive economic recovery, primarily driven by the semiconductor sector, raising concerns over a "semiconductor mirage."

According to Yonhap News Agency, the concentration in chipmakers is becoming more pronounced, with Samsung Electronics soaring 15.8 percent and SK hynix rising 11.5 percent within just three trading sessions this year. These two companies are substantially outperforming the index's 7.3 percent gain, now representing more than 35 percent of the Kospi's total market capitalization, an unprecedented level. This dominance implies that the index can rise even when more stocks decline than advance. For instance, on Monday, despite the Kospi's 147-point jump, over half of the listed shares saw a decline.

This uneven rally underscores significant economic realities. Korea's exports exceeded $700 billion last year, setting a new record, primarily fueled by robust memory demand linked to AI, which boosted semiconductor exports by 22.2 percent year-on-year. Beyond semiconductors, however, the outlook is less optimistic, with exports of petrochemicals, secondary batteries, and steel falling by 11.4 percent, 11.9 percent, and 9.0 percent, respectively. In fact, nine of the country's 15 major export categories experienced negative growth.

While the strong performance of semiconductors is beneficial, overreliance poses risks. Excessive concentration can render both the economy and financial markets structurally vulnerable, exacerbating disparities among export industries and between exports and domestic demand. Bank of Korea Governor Rhee Chang-yong cautioned that excluding the information technology sector, growth would be limited to approximately 1.4 percent, significantly below the central bank's overall forecast of 1.8 percent. Recovery disparities across sectors, he warned, could widen the disconnect between headline indicators and real economic conditions, resulting in a K-shaped recovery that is neither sustainable nor complete.

A stock market rally detached from the real economy also risks exacerbating inequality by widening the gap between asset holders and wage earners. Policymakers should focus on mitigating excessive concentration and ensuring that the benefits of growth are more evenly distributed across sectors. This will necessitate easing regulations to foster new industries and advancing structural reforms so that the advantages of growth extend beyond a narrow group of beneficiaries.