KOSPI Breaches 5,000: Historic Rally Driven by Tech and Policy

KOSPI Breaches 5,000: Historic Rally Driven by Tech and Policy • Historic Milestone: On January 22, 2026, the KOSPI index surpassed 5,000 for the first time during trading, marking an approximate 86% increase since the current administration took office about seven months prior. • Key Drivers: The surge was primarily driven by the "semiconductor supercycle" and the global AI boom, along with strong performances in the robotics, defense, shipbuilding, and nuclear power sectors. Additionally, the Lee Jae-myung administration's aggressive "Corporate Value-up" policies and tax reforms intended to resolve the undervaluation of the Korean market played a significant role. • Investor Behavior: The rally was led by foreign and institutional investors who heavily bought semiconductor, nuclear, and shipbuilding stocks. Conversely, individual investors largely used the rally as an opportunity to sell and realize profits. • Conflicting Market Outlooks: ◦ Still Undervalued: Analysts point out that despite the rise, the Korean market remains undervalued globally. The P/B ratio (1.58) is still significantly lower than the S&P 500 (5.51), and earnings forecasts for major tech companies have skyrocketed by 141% over the last six months. ◦ Overheated: Concerns exist regarding the speed of the ascent. Experts note that excluding major semiconductor stocks like Samsung Electronics and SK Hynix, the index would effectively be around the 3,400 level, suggesting the market is technically overheated and may face a short-term correction