In a remarkable turn of events, South Korea’s KOSPI index has achieved a historic milestone by surpassing the 6,000-point threshold for the first time. This achievement follows closely on the heels of the index breaching the once-unthinkable 5,000-point mark just a month prior. On Wednesday, the KOSPI rose by over 2%, hitting an intraday record high of 6,144.71 points, fueled by a surge in global demand for memory chips, which significantly boosted the share prices of major players Samsung Electronics and SK Hynix.
According to industry data, the current market capitalization of South Korea’s stock market has exceeded $3.76 trillion, an increase of approximately $2.23 trillion since the start of 2025. This surge has propelled South Korea to surpass France in market capitalization, placing it ninth globally. Earlier in January, the South Korean stock market had already surpassed Germany, marking a historic entry into the top ten global markets.
Market analysts have noted a significant shift in investor sentiment, highlighting that South Korea’s stock market, once overlooked by foreign funds due to its lingering low valuations, is now emerging as a prominent player on the global stage. The recent phenomenon of ‘AI panic trading’ has played a beneficial role, as domestic stocks are heavily weighted toward hardware manufacturing rather than software.
The Korean National Assembly is expected to pass a bill aimed at mandating the cancellation of treasury shares, a measure intended to enhance shareholder returns by preventing companies from holding shares indefinitely. This legislative move is anticipated to further boost investor confidence. Additionally, the U.S. Supreme Court’s recent ruling to overturn President Trump’s retaliatory tariffs is being perceived as a positive development for South Korea’s export-oriented economy. Analysts expect that South Korean exporters, especially in electronics and components, will benefit from reduced uncertainty regarding tariffs.
However, the sustainability of the KOSPI’s recent surge remains a topic of discussion among experts. Jung In Yun, CEO of Fibonacci Asset Management Global, noted that as the index hits 6,000 points, any further gains may be more gradual, heavily dependent on the performance of earnings and whether the market can diversify beyond a few high-performing semiconductor stocks. Some analysts are also observing a potential shift in local retail investor behavior, with signs indicating a renewed interest in domestic equities over U.S. stocks. If this trend continues, it could catalyze further market gains.
Despite the rapid ascent of the KOSPI, some market observers are cautious, closely monitoring valuation levels. Matthew Haupt, portfolio manager at Wilson Asset Management, indicated hesitation in initiating new positions in KOSPI futures due to the recent strong performance of the index.
On the bright side, the performance of leading chip manufacturers like Samsung and SK Hynix has been nothing short of remarkable. Since the beginning of 2025, Samsung’s share price has nearly quadrupled, while SK Hynix’s stock has surged roughly sixfold. Analysts remain optimistic about the outlook for these companies, as ongoing memory chip shortages and rising AI-driven demand are expected to provide continued support.
Following this positive sentiment, financial institutions such as Citigroup and Macquarie Capital have raised their target prices for these South Korean chip giants, with Macquarie projecting a potential 65% upside for Samsung Electronics.
In a broader market outlook, Nomura Securities has adjusted its mid-year target for the KOSPI to 8,000 points. This projection is underpinned by factors including a potential memory supercycle, strong profitability in AI-related capital expenditure chains, and improvements in the physical AI supply chain. Nomura analysts suggested that for South Korea to achieve higher valuations, a focus on corporate value reform and structural enhancements in the KOSDAQ market will be pivotal.
