[Market ING] KOSPI Surpasses 6,200: Sustainability of the Rally Put to the Test

Weekly KOSPI Expected Range: 5,800 to 6,800 Points

The KOSPI has repeatedly broken historic highs and has now surpassed the 6,200 mark. As the sharp and continuous rise fuels concerns over overheating, the market is closely watching whether the upward trend can be sustained this week amid both domestic and global issues.

Yonhap News Agency

Last week, the KOSPI rose by 7.50% and the KOSDAQ by 3.36%. On February 25, the KOSPI crossed the 6,000-point milestone for the first time ever, and on the 26th, it surged past the 6,300 mark during intraday trading. Lee Kyungmin, a researcher at Daishin Securities, commented, "The KOSPI broke through 6,000 points for the first time in just 18 trading days after surpassing the 5,000 mark on January 27. Performance visibility is rapidly increasing, especially in the semiconductor industry, and the combination of commercial law amendments and policies to enhance corporate value is driving an unprecedented explosive rally in the history of the Korean stock market."

Kim Jongmin, a researcher at Samsung Securities, stated, "The KOSPI has not only passed the 6,000 mark but has quickly settled above 6,200. What stands out is the acceleration in breaking these key milestones. It took 85 trading days to move from 3,000 to 4,000, 63 days from 4,000 to 5,000, and only 18 trading days to surpass 6,000. Since the beginning of the year, the KOSPI has fallen on only 7 out of 38 trading days, which shows that the Korean stock market has become accustomed to rising."

Some experts believe that the domestic stock market is demonstrating enough strength to maintain its rally despite global uncertainties. Kim noted, "Even with lingering global risks, the Korean market is proving it has overwhelming resilience to withstand severe headwinds."

This resilience is attributed to strong earnings and ample liquidity. Kim explained, "While the KOSPI has surged 48% since the start of the year, raising concerns about valuations, the 2026 net profit estimates for controlling shareholders have also been revised up by 47% over the same period. The index has soared, but earnings have grown accordingly, so the 12-month forward price-to-earnings ratio (PER) remains at around 10 times, similar to early in the year, meaning there is no valuation burden." Liquidity is also being supported by ongoing 'money moves.' Kim commented, "A massive influx of individual investor funds is now driving the market through a new passive form-ETF purchases, rather than short-term speculation in individual stocks. Although the speed of inflows appears steep, there is still additional room for growth if we consider the historical proportion of equity assets."

The sustainability of the current rally is now set to be tested. Lee predicted, "Until the end of March shareholder meetings and the pre-earnings season for the first quarter of the year, the upward momentum in earnings forecasts may slow. With the completion of the third commercial law amendment last week, the policy momentum has peaked, so the KOSPI will need to weather both domestic and global issues to prove the sustainability of its rise."

Na Jeonghwan, a researcher at NH Investment & Securities, said, "There are concerns that the momentum for stocks related to the commercial law amendment may weaken following the passage of the third amendment," but added, "Ahead of the March shareholder meeting season, shareholder proposals are likely to increase, and companies with a high proportion of treasury shares may see stronger demands for shareholder returns." NH Investment & Securities projected the KOSPI's expected band this week at 5,800 to 6,800 points.

Key events this week include the release of the US February ISM Manufacturing Index on March 3, the US February ADP private employment report and China’s February National Bureau of Statistics Manufacturing PMI on March 4, and the US February ISM Services Index on March 5. On March 6, South Korea’s February Consumer Price Index (CPI), US January retail sales, and the US February employment report will be released. In addition, China’s largest annual political events, the National People's Congress and the Chinese People's Political Consultative Conference (commonly known as "Lianghui"), will be held from March 4 to 5.

Lee noted, "The Lianghui, which opens on March 4, will be a watershed for determining the direction of cyclical stocks. The key focus for the market is whether China will set a gross domestic product (GDP) growth target of around 5% and introduce measures to support domestic demand. If the Chinese government demonstrates a strong commitment to boosting domestic demand through large-scale fiscal investment, beneficiaries along the path of fiscal spending could come into the spotlight."

This content was produced with the assistance of AI translation services.