Bank employees look at monitors showing indexes of the KOSPI, Kosdaq and foreign exchange rates at the dealing room of Hana Bank's headquarters in central Seoul, July 3. Yonhap

Korea's secondary and tech-heavy Kosdaq market is losing its vigor, with its daily average stock trading volume plunging to a seven-month low.

This is in a stark contrast to the country's main benchmark KOSPI, which exceeded 2,800 during Friday's trading session, showing signs of breaking out of its boxed range.

According to the Korea Exchange (KRX), the country's bourse operator, the daily average stock trading at the Kosdaq market stood at 8.7 trillion won ($6.3 billion) last month, which was the lowest since November last year.

Kosdaq investors' share turnover rate also nosedived to 30.2 percent in June, which is the lowest since October 2017. The share turnover rate is calculated by dividing the total trading volume of shares over a certain period by the number of listed stocks. A high turnover rate indicates active trading with strong investor interest, while a low turnover rate hints at sluggish market sentiment.

The poor performance of the Kosdaq market is more pronounced when compared to the KOSPI. While the KOSPI has risen by more than 8 percent this year, the Kosdaq has fallen by over 2 percent.

This year's contrasting movements in the two stock markets are quite the opposite of last year, when the Kosdaq index rose by 27.6 percent while the KOSPI increased by 18.7 percent.

Experts attribute the Kosdaq's poor performance this year to the sluggishness of the secondary battery sector, which was the key driving force behind the Kosdaq's rise last year. The Kosdaq market's concentration of growth stocks, such as bio venture companies, has also made it more vulnerable to the negative impacts of sustained high interest rates.

Additionally, the ongoing controversies surrounding the planned implementation of a financial investment income tax at the start of next year have also prompted local retail investors to avoid the Kosdaq market, which tends to be riskier than the KOSPI.

Analysts anticipate a slight improvement in the environment surrounding key stocks in the Kosdaq during the second half of the year, driven by reduced uncertainty over U.S. interest rate cuts, which could create favorable conditions for growth stocks.

"In order for the Kosdaq index to rise, the earnings improvement in key sectors like secondary batteries and biotech stocks must accelerate significantly, or interest rates should decline substantially," said Kim Byung-yeon, an analyst at NH Investment & Securities.