[why&next] Hyundai Motor Group Soars, KOSPI Sets Off Fireworks... Aiming for 4,000 Points

Hyundai Motor and Kia Surge on Hopes for South Korea-U.S. Trade Deal
KOSPI 4,000 Within Sight on the Back of Earnings, Interest Rates, and Policy Momentum
U.S.-China Trade Tensions and Soaring Won-Dollar Exchange Rate Remain Key Variables

The KOSPI index has once again set off fireworks by breaking through the 3,700-point level. Automotive stocks, such as Hyundai Motor Company, which had been sluggish for some time, surged on renewed expectations of a successful conclusion to the South Korea-U.S. trade negotiations, driving the index higher. Market leaders Samsung Electronics and SK Hynix also maintained strong upward momentum, leading analysts to say that the KOSPI reaching 4,000 points is now within sight.

Automotive Stocks Surge Amid Rapid Progress in Korea-U.S. Tariff Negotiations

According to the Korea Exchange on October 17, the KOSPI closed the previous day at a record high of 3,748.37, up 2.49%. This surpassed the previous intraday all-time high of 3,659.91, set just a day earlier, leaving the index only about 250 points away from the 4,000 mark.

In particular, the automotive sector stood out, rising by 7.58%. Investor sentiment rebounded as news emerged that the long-standing Korea-U.S. tariff negotiations were nearing completion. Hyundai Motor Company soared by 8.28%, and Kia rose by 7.23%, both securing their positions among the top ten companies by market capitalization.

Until now, automotive stocks, including Hyundai Motor Company, had failed to shine even as the KOSPI repeatedly hit new highs and large-cap stocks set fresh records. This was because they were subject to a higher 25% tariff, which was less favorable compared to the 15% tariff imposed on major competitors from Germany and Japan. While the KRX Semiconductor Index jumped 40% between September 1 and October 15, the KRX Automotive Index fell by 2.78%, ranking among the lowest performers within the overall KRX indices.

Im Eunyoung, a researcher at Samsung Securities, stated, "If the tariff agreement is reached, we expect normalization of valuations due to momentum from increased U.S. market share, improved business environment, and developments such as humanoid robot technology." She set the target prices for Hyundai Motor Company and Kia at 400,000 won and 230,000 won, respectively. Since the combined U.S. market share of Hyundai Motor Company and Kia (12%) already surpasses that of Honda and Nissan, analysts predict that the removal of the tariff gap with Japanese firms will trigger a rebound in their stock prices.

If tariff uncertainties are resolved, share buybacks are also expected to begin by the end of the year. Previously, Hyundai Motor Company announced at last year's 'CEO Investor Day' that it planned to buy back 4 trillion won worth of its own shares between 2025 and 2027. Im also indicated, "From this share buyback onward, the company plans to increase the proportion of preferred shares purchased to reduce the gap between common and preferred shares," suggesting investment opportunities in Hyundai Motor Company's preferred shares. On this day, both Hyundai Motor Company preferred shares and Hyundai Motor Company 3rd Preferred Shares B rose by more than 5%, each hitting new 52-week highs.

KOSPI 4,000 Within Reach... Key Variables

Optimism about the KOSPI reaching 4,000 points is spreading, fueled by the start of an international interest rate cut cycle, strong third-quarter earnings domestically, and growing expectations for the third amendment to the Commercial Act. Kim Yonggu, a researcher at Yuanta Securities, said, "In 2026, the KOSPI is expected to remain neutral to positive within the 3,300 to 4,000 point band," and added, "The return of individual investors will determine the success or failure of next year's challenge to reach 4,000 points."

Lee Sanghyun, a researcher at Meritz Securities, commented, "Changes in net profit estimates for 2026 and 2027 are expected to show a strong correlation with the KOSPI index," and explained, "Currently, the KOSPI's net profit estimate for 2026 is 251 trillion won, and if the average growth rate of 15.3% in the bullish case is achieved, net profit could reach 307 trillion won in 2027 and the KOSPI could reach 4,216 points."

U.S.-China trade tensions and exchange rates are cited as variables. Kim Daejun, a researcher at Korea Investment & Securities, said, "China's rare earth export controls and additional U.S. tariffs on Chinese goods are negative for risk appetite, and the higher won-dollar exchange rate is also a burden." However, he added, "Such trade uncertainties have a limited impact on the market due to working-level discussions and past learning effects. Unless the won-dollar exchange rate approaches 1,500 won, the probability of the current bull market being reversed remains low."