South Korea’s benchmark KOSPI index surged to another all-time high on September 11, closing at 3,344.20 points, up 0.90% from the previous day. It was the index’s eighth straight day of gains and its second consecutive record close, marking the first time it has broken through the 3,340-point threshold.
Analysts say the rally is being fueled by a mix of supportive government policies, strong earnings expectations in key sectors, and stable currency conditions. According to Sul Tae-hyun of DB Investment & Securities, valuations remain reasonable, with the price-to-earnings ratio in line with or even below past peaks, leaving room for further growth. Investors are also encouraged by government initiatives aimed at boosting shareholder returns, including potential tax reforms on dividend income and mandatory treasury stock retirements.
Semiconductors, the backbone of South Korea’s economy, are playing a central role in driving the index higher. Kim Seok-hwan of Mirae Asset Securities noted that investor sentiment toward the sector is “exceptionally strong,” with expectations for next year’s profits already built into share prices. Many believe this momentum could continue to fuel the broader market in the months ahead. Currency stability is also a tailwind, with analysts expecting a weaker U.S. dollar due to slowing U.S. growth and anticipated Federal Reserve rate cuts, which would make Korean equities more attractive to global investors.
But not everyone is convinced the rally can last without hiccups. Sul warned that if policy measures, rather than genuine earnings strength, remain the main driver, valuations could become stretched. Similarly, Lee Woong-chan of iM Investment & Securities suggested that after such sharp gains this year, the KOSPI may have limited room to climb further, citing possible earnings slowdowns in the third quarter and ongoing uncertainty about the U.S. economy.
For now, optimism is outweighing caution. As South Korea’s stock market enjoys an unprecedented run, all eyes are on whether corporate performance and global economic trends can sustain the rally through the end of the year.
