KOSPI Achieves the Dream '5,000 Points'... "Bull Market Expected to Continue"

Strong Performance of Leading Sectors Like Semiconductors and Automobiles Drives Rally
Government's Stock Market Stimulus Policies Provide Additional Support
Forecasts Suggest KOSPI Could Reach 5,300 in the First Half of the Year

The KOSPI has reached the 5,000-point milestone. Since the beginning of this year, the KOSPI has surged relentlessly, surpassing the 5,000 mark during trading hours. After breaking through the 3,000 and 4,000 levels last year, the KOSPI has continued its unstoppable upward trend this year, conquering even the 5,000 mark.

The semiconductor sector initially led the market rally, followed by automobile stocks, which helped the KOSPI reach 5,000 points. Samsung Electronics, the market leader, has risen by 24.69% so far this year, SK Hynix by 13.67%, and Hyundai Motor by 85.16%. Improvements in the semiconductor industry environment and earnings have laid the foundation for the KOSPI to break through the 5,000 mark. Subsequently, stocks in the Hyundai Motor Group, led by Hyundai Motor and reflecting expectations for robotics, took over the baton and continued to drive the KOSPI upward. In addition, the government's stock market stimulus policies also contributed. Byun Junho, a researcher at IBK Investment & Securities, analyzed, "The strong market trend since the beginning of the year is the result of continued government efforts to vitalize the capital market and support the stock market, combined with the semiconductor boom and the robot theme that emerged following the world's largest electronics and IT exhibition, CES."

With the KOSPI now above 5,000 points, market attention is expected to focus on how much longer the upward trend can continue. Experts believe that, since this rally is based on solid earnings, the upward momentum is unlikely to break in the near term. Kim Jaeseung, a researcher at Hyundai Motor Securities, said, "This bull market is fundamentally driven by profit growth, so the KOSPI still remains undervalued." The easing of concentration in specific sectors is also viewed positively. Kim added, "The fact that the warmth is spreading to sectors beyond semiconductors among large-cap KOSPI stocks is also favorable for the bull market. While there was significant concentration in semiconductors until December, since January, the rally has expanded to surrounding sectors. The combination of net buying by foreign investors, the movement of individual investors' funds, and a favorable capital environment is creating conditions for the entire KOSPI to trend upward, supporting the continuation of the bull market."

However, the possibility of a short-term correction due to the sharp rise cannot be ruled out. Lee Sunghoon, a researcher at Kiwoom Securities, said, "While the upward path may continue, it is a period where some short-term moderation in pace should be considered. As a result of the KOSPI's rapid rise since the beginning of the year, the KOSPI deviation from its 120-day moving average has now reached 129.9%, the highest level since 2002, indicating that the market has entered a technically overheated phase. To sustain further rallies, it is necessary to alleviate some of this overheating pressure."

Nevertheless, even if a short-term correction occurs, the index is unlikely to fall significantly. Researcher Byun Junho said, "The technical burden on the KOSPI mainly stems from large-cap semiconductor and automobile stocks such as Samsung Electronics, SK Hynix, Hyundai Motor, and Kia, so there is a high possibility that these stocks may take a short-term breather. However, considering the government's consistent policy stance, expectations for SK Hynix's fourth-quarter earnings to be announced on the 29th, and strong semiconductor export figures to be released on February 1, the likelihood of a significant decline in the index is low. The dual-track expectations for policy and semiconductors remain valid." He added, "The strong performance in January also increases the likelihood that expectations for an annual rally will continue through the first half of the year."

After surpassing the 5,000 mark, the market is expected to see a broadening of winning stocks. Researcher Lee Sunghoon said, "If the KOSPI reaches 5,000 points, a full-fledged phase of stock expansion is likely to unfold. Looking at the periods before and after the KOSPI reached the 3,000-point and 4,000-point milestones last year, a common pattern emerged: after a rally, the market entered a consolidation phase. Notably, after the KOSPI broke through each thousand-point level, sector concentration eased and the number of rising stocks expanded."

There are also projections that the KOSPI could reach the 5,300 level in the first half of the year. Lee Kyungmin, head of FICC Research at Daishin Securities, said, "Some are raising the possibility of a correction after the KOSPI touches 5,000, but we believe the upward potential will expand further after breaking through 5,000. This is because earnings forecasts have risen so rapidly that the 12-month forward price-to-earnings ratio (PER) remains at just above 10 times, which is still at the long-term average. Even if there are some fluctuations at the 5,000 level, we expect the overall upward trend to continue. We forecast that the KOSPI will break through the 5,300 mark in the first half of this year."