Korea must convert stock surge into real growth

South Korea’s stock market vaulted past the 6,000 threshold for the first time, extending a blistering rally in the KOSPI. The milestone comes roughly a month after the benchmark pierced 5,000, a signature campaign pledge of President Lee Jae-myung.

Even as foreign investors moved to lock in gains, selling shares to realize profits, domestic retail investors and pension funds continued to drive the advance. Analysts say the rally has been underpinned by solid corporate earnings, particularly from memory chipmakers riding artificial intelligence-driven demand. Still, some caution that a partial correction may be inevitable after such a steep and unprecedented short-term surge.

On Feb. 25, the KOSPI closed at 6,083.86, up 1.91 percent from the previous session. Historically, the climb has been gradual: it took 13 years and six months for the index to advance from 2,000 to 3,000, and another four years and nine months to reach 4,000. By contrast, the 5,000 mark was breached on Jan. 27, and the 6,000 level followed just 29 days later. Market observers attribute the breakneck ascent to a combination of policy measures aimed at boosting equity valuations and explosive profit growth at semiconductor firms benefiting from AI-related demand.

South Korea’s stock market vaulted past the 6,000 threshold for the first time, extending a blistering rally in the KOSPI. The milestone comes roughly a month after the benchmark pierced 5,000, a signature campaign pledge of President Lee Jae-myung.

Even as foreign investors moved to lock in gains, selling shares to realize profits, domestic retail investors and pension funds continued to drive the advance. Analysts say the rally has been underpinned by solid corporate earnings, particularly from memory chipmakers riding artificial intelligence-driven demand. Still, some caution that a partial correction may be inevitable after such a steep and unprecedented short-term surge.

On Feb. 25, the KOSPI closed at 6,083.86, up 1.91 percent from the previous session. Historically, the climb has been gradual: it took 13 years and six months for the index to advance from 2,000 to 3,000, and another four years and nine months to reach 4,000. By contrast, the 5,000 mark was breached on Jan. 27, and the 6,000 level followed just 29 days later. Market observers attribute the breakneck ascent to a combination of policy measures aimed at boosting equity valuations and explosive profit growth at semiconductor firms benefiting from AI-related demand.

Despite foreign investors’ net sales exceeding 10 trillion won so far this year, the market has found support in steady inflows from retail investors and pension funds, often channeled through exchange-traded funds and other instruments. Notably, retirement savings previously parked in low-yield guaranteed products have shifted rapidly into equities. The influx of longer-term capital is beginning to reshape a market long characterized by volatility and short-term trading.