[Econ & Biz] KOSPI back above 3,000 — what’s next?

The past few weeks have been especially good for South Korea's stock market.

The benchmark KOSPI crossed the 3-thousand mark threshold last Friday for the first time in 3 and a half years, and hopes are high that this could be just the beginning for South Korean shares.

For more, we turn to our economic correspondent Park Jun-han.

Welcome.

Jun-han, it's been three weeks since the June 3rd presidential election.

And it seems like the market is extending its post-election honeymoon rally?

That's right, Dami. South Korea's benchmark KOSPI broke 3,100 on Tuesday for the first time in 3 years and 9 months.

It's also notable that South Korea's stock market ranked first in returns for June among G20 countries.

And this is by far the highest increase among all G20 countries, as no other country saw gains exceeding 5% in June.

Now, among the various factors that led to the rally, experts point to eased uncertainties, and expectations surrounding the new Lee Jae Myung administration's economic policies as key reasons for the surge.

Take a listen to what an economic analyst has to say about the momentum behind the rally.

"The weakening of the dollar, coupled with a cycle of fiscal policy expansion and interest rate cuts in emerging economies outside the U.S., has created a favorable environment for investment.

After a period of political uncertainty, the snap presidential election removed some of these and resulted in a strong inflow on policy expectations."

2. I see the reason why Korean stocks underperformed, but wasn't it just three months ago that the KOSPI recorded its yearly low?

How did it go up over 30% in just a few months?

Yes Dami.

The first half of 2025 in South Korea was marked by both internal and external uncertainties, which the market is extremely sensitive to.

As mentioned earlier, the political instability caused by the martial law declared last December by then-President Yoon Suk Yeol pressured investor sentiment and led to an outflow of foreign funds.

Moreover, tariff threats from U.S. President Donald Trump also negatively impacted investor confidence.

In early April, Trump announced plans to impose 25% "reciprocal" tariffs on Korea.

The announcement heightened concerns about inflation and contributed to the weakening of the competitiveness of South Korean exports.

However, Trump temporarily suspended reciprocal tariffs for 90 days just days after his initial announcement, leaving room for negotiation.

Since then, stock markets around the world, which had plunged earlier, began to rebound.

President Lee, who has long promised to usher in the "KOSPI 5,000 era," declared the start of this new chapter as, quote, a "new period with new hopes."

Take a listen to what he said last week.

"I hope that the Korean stock market, which is at 2,992.1 right now, will pass the 3,000 point mark and move into a new period, with new hopes."

Lee also visited the Korea Exchange earlier this month and highlighted the importance of dividend payouts, and a zero-tolerance policy for stock price manipulation, pledging to lead the market through various reforms, including shareholder return policies and amendments to the Korean Commercial Act.

3. President Lee Jae Myung is more committed than ever to achieving KOSPI 5,000 during his term.

Of course, it will be crucial for President Lee's policy pledges to be implemented swiftly.

Take a listen to what a chief economist had to say about KOSPI's long-term growth outlook.

"While the government is trying to stimulate domestic demand through a large-scale supplementary budget, measures such as expanding AI investment and improving systems related to commercial law amendments should be implemented swiftly.

Moreover, the early settlement of tariff negotiations will help lay the foundation for achieving this goal within the next two to three years, if not immediately."

4. It could not be a smooth ride to see KOSPI reach 5-thousand.

What are some of the obstacles that could hinder a further rally of South Korean stocks?

Actually, there are some variables that could prevent further momentum.

Tariff negotiations are approaching, with less than two weeks left until the deadline.

Also, although there's a temporary ceasefire, the Middle Eastern conflict between Israel and Iran could heighten market uncertainties if both sides clash again.

Take a listen to what capital market experts have to say about factors that might affect the local market.

"In the case of wars, we'll have to wait and see how long they last and how predictable they are, as both factors will affect the economy going forward."

"I think the overall U.S. economy and tariff policy, along with South Korean companies' second quarter results, will be key factors in determining how our stock prices move in the third quarter."

Investing always comes with both opportunities and risks.

In times of rapidly changing markets, I encourage viewers of our channel to manage their assets wisely.

Thank you, Jun-han, for the report.

Thank you, Dami, I hope to see you again soon.