The total market capitalization of the secondary bourse Kosdaq surpassed 458.4 trillion won ($354.8 billion), reaching an all-time high on Wednesday morning. However, in the afternoon, stock prices began fluctuating.

Just a day after hitting a record-high of 454.57 trillion won on Tuesday, the Kosdaq market capitalization continued to expand, surpassing the previous day's record.

The recent rise and drop can be attributed to significant influence of the market capitalization of battery materials firm EcoPro and its subsidiary electric vehicle battery material supplier EcoProBM, which together make up 20.4 percent of the total Kosdaq market capitalization.

EcoProBM's market capitalization accounts for 10.44 percent of the Kosdaq, while EcoPro's market capitalization is 9.96 percent.

EcoProBM's stock price at 9:30 a.m Wednesday was 511,000 won, up 10.61 percent from the previous trading day, marking a continuous upward trend for seven consecutive trading days.

EcoPro also saw a rise in its stock price at 9:30 a.m. Wednesday to 1.42 million won, rising 10.05 percent.

The market capitalization of both stocks has been steadily rising, reaching a significant milestone by surpassing 80 trillion won on Wednesday morning.

EcoProBM's market capitalization reached 52.9 trillion won, while EcoPro's market capitalization surpassed 37 trillion won.

This means EcoProBM's market capitalization exceeded that of Hyundai Motor, which holds the 10th position in South Korea’s benchmark Kospi market capitalization with 42.41 trillion won.

Additionally, EcoPro has also exceeded the market capitalization of Kia, which holds the 11th position with 34.12 trillion won.

The combined market capitalization of EcoProBM and EcoPro reaching over 80 trillion won also means that it came close to SK hynix, which boasts the third-biggest market capitalization of over 82 trillion won.

According to local industry insiders, these rises are thought to be primarily influenced by a short squeeze triggered by the battery boom.

“It seems like foreign investment in EcoPro is influenced more by the short squeeze effect rather than fundamental factors such as EcoPro's own performance improvement,” Chung Won-seok, an analyst at HI Investment and Securities said.

A short squeeze happens when many investors bet against a stock, but instead of the price going down, it unexpectedly surges. In such situations, short sellers rush to cover their positions, leading to a rapid acceleration of the stock's price increase as they try to limit their losses.

Additionally, in a recent report published Friday, Samsung Securities said that EcoPro has a strong probability of being added to the MSCI Korea Index in August.

This potential inclusion could present new opportunities for listed companies, as global passive funds, which track market indices, are expected to purchase the newly added stocks.

“EcoPro's stock price is likely to maintain its high levels for the time being due to factors such as a short squeeze driven by foreign investors and the possibility of being included in the MSCI index next month,” Jeon Chang-hyun, an analyst at Daishin Securities said.

However, some industry insiders say that this upward trend will end soon, as EcoPro's stock prices fluctuated on Wednesday afternoon.

EcoPro, which showed strong momentum in the morning, rising to 1.539 million won at 1:06 p.m., experienced a sharp decline within about 40 minutes and dropped as much as 26 percent to 1.136 million won at 1:54 p.m.

On Wednesday, EcoPro's closing price was 1.228 million won, showing a decline of 5.03 percent from the previous day.

Similarly, EcoProBM also closed at 455,000 won on the same day, seeing a decrease of 1.52 percent compared to the previous day.

The Kosdaq index also closed at 900.63, marking a 4.18 percent decrease from the previous day. A total of 1,480 stocks listed on the Kosdaq experienced a decline in their closing prices on Wednesday as well.