South Korea’s stock benchmark, the Kospi milestone, surged past the historic 4,000-point mark on Monday. The rally reflects strong investor confidence driven by government policies designed to support equities and narrow the long-standing Korea discount.
The index first crossed 4,000 points shortly after the opening bell and climbed to 4,038.39 by midday. Foreign and institutional investors fueled the momentum with net buying. Meanwhile, Samsung Electronics hit 100,000 won in intraday trading, marking a major corporate milestone.
The Kospi milestone comes only four months after surpassing the 3,000 level on June 20, following the new administration’s inauguration. It quickly rose to 3,100 by June 24, 3,200 by July 14, and briefly stalled in August amid trade talk uncertainties. The index then regained strength, reaching 3,300 on September 10 and 3,400 on September 15.
In October, the Kospi accelerated further, surpassing 3,500 on October 2, 3,600 on October 10, 3,700 on October 17, and 3,800 on October 21. By Thursday, it had topped 3,900, culminating in the 4,000 milestone on Monday.
Analysts suggest the rally could continue, noting the Kospi remains undervalued compared to global peers. Its forward P/E ratio stands at 11.6, above the 20-year average of 10 but low relative to past bull markets. Hyundai Motor Securities strategist Kim Jae-seung said this indicates room for further growth without significant overvaluation pressures.
Wall Street also views the Kospi milestone positively. Morgan Stanley projects the index could reach 4,200 by June, while JP Morgan’s bull-case scenario sees it hitting 5,000 within 12 months. JP Morgan added that removing governance-related discounts and improving corporate balance sheets could push the index even higher.
Policy support has been a key driver. The July Commercial Act revision, which requires directors to act in all shareholders’ interests, boosted market confidence. Additionally, improved dividend policies encourage long-term investment, according to Sue Lee, S&P DJI’s APAC head of Index Investment Strategy.
Experts emphasize that corporate earnings must strengthen to sustain momentum. Lee Hyo-seob of the Korea Capital Market Institute noted that small- and mid-cap stocks will play a crucial role, as blue-chip performance alone cannot maintain the rally.
The Kospi milestone signals robust investor optimism, reinforced by policy measures and strong corporate performance, setting the stage for the next target of 5,000 points.
