They said escaping the market was by intelligence… "Wake up and find your money multiplied" cheers

Astonishing surge from 2400 to 4000

S. Korea 68% return this year 'world king'

'KOSPI 4042' K-premium era

K-stock market writes new history

This year's return is four times that of the S&P500

Samsung Electronics surpasses 100,000 won for the first time

The KOSPI index surpassed the 4,000 mark for the first time in history. It has been about 4 years and 9 months since it first exceeded 3,000 in January 2021. The Korean stock market has shed its long-standing stigma of the 'Korea discount' (undervaluation of the Korean market) and ranks first in returns this year among 42 indices in 32 major countries including the U.S., China and Japan.

On the 27th, the KOSPI closed at 4,042.83, up 2.57%. It has surged 18.05% just in October. The year-to-date gain is 68.49%, more than four times that of the U.S. benchmark S&P500 (15.47%).

The KOSPI exceeded 3,500 on the 2nd of this month and then kept climbing relentlessly to 3,600 on the 10th (right after the Chuseok holiday), 3,700 on the 16th, 3,800 on the 20th and 3,900 on the 24th. Analysts say this is thanks to a combination of increasing global liquidity, a booming semiconductor market and government policies to modernize the stock market.

The U.S. easing cycle in benchmark interest rates that began after September spurred expectations of a 'liquidity rally,' pushing up global markets. As the artificial intelligence (AI) market rapidly expanded, the domestic 'semiconductor top two' stocks also caught fire. On that day Samsung Electronics closed at 102,000 won, up 3.24%, ushering in the '100,000-won electronics' era.

The government's stock market modernization policy, aimed at shifting wealth concentrated in real estate into the stock market, also raised expectations for structural improvement in the domestic capital market, industry sources said. Since the April 11 low (2432.72), foreign investors have scooped up about 12.5 trillion won worth of securities in the KOSPI market. Kang Dae-gwon, CEO of Life Asset Management, said, "The opening of the KOSPI 4000 era is a symbolic event showing that the domestic market, once ridiculed, has finally escaped undervaluation," and added, "It will be the starting point of a money move from real estate to the stock market."

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Fell to 2200 then 'reversed'… Foreigners scooped up 12 trillion won since April

Until early this year, the domestic market seemed hopeless. When the U.S. market fell, the Korean market fell with it; when it rose, the Korean market often lagged behind. Among weary investors, a cynical catchphrase circulated: 'Escaping the market is in order of intelligence.'

But in just seven months the KOSPI surged a staggering 1,758 points in a reversal drama. Among investors who failed to invest in time in the domestic market, FOMO (fear of missing out) has actually spread. Experts agree that the 'KOSPI 4000 era' symbolically means the domestic market has established itself as a powerful means of asset accumulation.

◇ Stimulus, semiconductors, liquidity drove the rise

According to the Korea Exchange on the 27th, the KOSPI has surged 68.49% year-to-date. It ranks first among 42 indices in 32 major countries. It is far ahead of the second-place VN30 index of Vietnam (43.77%).

On the same day when global markets rose on hopes of a U.S.-China trade agreement, the KOSPI's gain (2.57%) outpaced neighboring countries such as Japan's Nikkei 225 (2.46%), China's Shanghai Composite (1.16%) and Taiwan's TAIEX (1.68%).

Experts cite the government's capital market modernization policy as the first reason the Korean market outperformed global markets. The domestic market, pushed down to the low 2000s amid President Yoon Suk-yeol's turmoil and impeachment concerns and U.S. reciprocal tariff shocks, rose from 2,500 to 2,700 in May on expectations for market stimulus measures ahead of the inauguration of the Lee Jae-myung government.

Global investors took note of the government's pledge to change the market's structure and return funds concentrated in real estate to the market. Foreign capital flowed in and out like the tide in response to government announcements. When the government announced in August that it would tighten the large shareholder standard for capital gains tax, the KOSPI, which was heading toward 3,300, suddenly fell to around 3,100. When it was announced in September that the large shareholder standard would be reverted, the KOSPI retook 3,300.

The market's upward momentum noticeably widened when the U.S. interest-rate cut cycle gained traction in September. Investors expecting a 'liquidity rally' from money entering global markets poured funds into equities. Following September, expectations grew in October that the U.S. Federal Reserve would cut rates and stop quantitative tightening (QT, balance-sheet reduction).

◇ Emergence of new export industries

What accelerated the recent KOSPI rise was the 'semiconductor top two,' which occupy the top two spots by market capitalization. The outlook for explosive growth in the AI-related market strengthened as OpenAI repeatedly signed mega-chip purchase contracts with NVIDIA (10 gigawatts), AMD (6 gigawatts) and Broadcom (10 gigawatts). The semiconductor chip scale contracted by OpenAI is about 10 times current production capacity. Expectation that semiconductor demand will grow exponentially pushed Samsung Electronics and SK Hynix up 46.34% and 98.88% respectively since September. The two stocks accounted for 54.7% of the KOSPI market capitalization increase.

Since September, 75% of foreign investment funds have flowed into Samsung Electronics. The market-cap dominance of the top stocks quickly lifted the index from 3,500 to 4,000.

As the Korean market leapt forward, the ranking of top market-cap companies also changed significantly. The market restructured around semiconductors, shipbuilding, defense and nuclear power. With attention on the shipbuilding cooperation plan with the U.S. called 'MASGA', HD Hyundai Heavy Industries, which was 21st in market cap a year ago, climbed 16 places to 5th. In one year its share price rose from the 190,000-won range to the 620,000-won range, up 215%.

Hanwha Aerospace, which attracted attention whenever geopolitical tensions rose, jumped from 23rd to 6th in market cap in one year. With a string of nuclear technology exports, Doosan Enerbility rose from 31st to 7th in market cap. Jeong Sung-han, Chief Investment Officer (CIO) of Shinhan Asset Management, said, "We have finally broken out of the 0.8–1.2 PBR box that persisted for the past 18 years," and added, "The 4,000 index shows that global investors have recognized that Korean listed companies have successfully improved their fundamentals beyond the growth and governance limits that caused the Korea discount."

Reporter Seongmi Shim smshim@hankyung.com