South Korea Stocks Enter ‘Premium’ Zone as Market Value Tops 6,100 Trillion Won

Kospi sets fresh records day after day

Index has surged 57% in less than four months

Investor sentiment rebounds as war fears ease

Strong earnings and market-support measures lift stocks

Margin loans hit 35 trillion won in historic liquidity rally

Inflation and rate hikes loom as second-half variables

South Korea’s Kospi is climbing at a breakneck pace. Investor sentiment has rebounded as concerns about an escalation of the Middle East war have eased. The benchmark index has jumped nearly 57% this year, helped by strong corporate earnings and government measures to energize the stock market. Brokerage firms say a Kospi reading in the 6,600 range would not be overvalued based on valuations. Investors broadly expect gains to continue as the artificial intelligence boom spreads from semiconductors to infrastructure sectors such as nuclear power and electrical equipment.

◇South Korea’s Buffett Indicator Tops 200%

The Kospi had surged 56.97% this year through April 27. That puts it on a faster pace than last year’s 75.6% rally and gives it the strongest return among major global equity markets. The combined market capitalization of South Korea’s stock markets — the Kospi, Kosdaq and Konex — totaled 6,104.6944 trillion won on April 27. That was up 31.87%, or 1,475.226 trillion won, from 4,629.4684 trillion won when the market first broke above the symbolic 5,000 level. The Kosdaq has also climbed to its highest level since the dot-com bubble of the early 2000s.

The so-called Buffett Indicator, which divides total stock market capitalization by nominal gross domestic product, rose above 200% for the first time. That puts South Korea ahead of Japan at 186.53% and China at 71.08%, while narrowing the gap with the U.S. at 227.95%. Baek Young-chan, head of research at Sangsangin Securities, said the index was recovering after a March drop tied to tensions between the U.S. and Iran. Market sentiment that the Kospi would have topped 7,000 if not for the war has become a powerful force behind the latest rally, he added.

In the U.S., Intel, a longtime laggard, posted a first-quarter earnings surprise that revived expectations for a semiconductor supercycle. Key AI-related companies such as Samsung Electronics and SK Hynix are concentrated in emerging Asian markets, helping lift regional equities more broadly. Japan’s Nikkei 225 rose 1.38% to close at 60,537 on April 27, topping 60,000 for the first time. The index has gained 10,000 points in just six months since Oct. 27, 2025. Bloomberg reported that emerging-market stocks had renewed record highs on optimism over the AI boom and easing Middle East war tensions.

In South Korea, Jeryong Industrial jumped 29.94%, Semyung Electric rose 17.35%, Iljin Electric gained 13.89% and LS ELECTRIC climbed 12.8%. Hotel Shilla added 5.78% after news that President Lee Boo-jin had bought shares.

Brokerage shares also extended gains as the Kospi’s record run continued, with SK Securities up 29.89% and Sangsangin Securities rising 13.48%. Robot stocks joined the rally as well, including EnRoboTics, up 29.89%, Robotoz gaining 18.97% and Rainbow Robotics advancing 9.31%, on expectations of strong synergy with AI.

◇Second-half slowdown risks emerge

Investor sentiment around equities has heated up. A historic liquidity-driven rally is underway as an unprecedented volume of money flows into stocks.

Data from the Korea Financial Investment Association showed outstanding margin loans at 35.463 trillion won as of April 24. The figure tracks funds investors borrowed from brokerages to buy stocks and have yet to repay. It is widely used as a gauge of leveraged stock buying and broader market sentiment.

Some analysts are turning more cautious, saying the Kospi may lose momentum in the second half after its strong first-half run. Concerns about U.S. inflation and the possibility of a return to interest-rate hikes are the main risks. Kim Jun-young, an analyst at IM Securities, said gains in South Korean equities could slow as investors shift their focus back to the U.S. market, which lagged during the war period.

Cho Ara and Choi Man-soo, Korea Economic Daily reporters rrang123@hankyung.com