South Korea’s KOSPI index surged 2.66% to enter technical bull market territory, marking a 20% rebound from April lows. The rally was fueled by President Lee Jae-myung’s inauguration and his pledge to launch an emergency economic team focused on AI, semiconductors and renewable energy investments. Financial and tech stocks led gains as investors welcomed the new administration’s market-friendly stance, including an ambitious (though unscheduled) target to push the KOSPI to 5,000 points.
The market’s strong response reflects optimism about Lee’s plans to address the “Korea discount” through corporate governance reforms and strategic industry support. Semiconductor stocks, which now account for nearly 40% of KOSPI’s market cap, benefited particularly from the president’s commitment to maintain Korea’s tech leadership. Analysts note the rally suggests growing confidence that the new government can deliver structural reforms to boost equity valuations.
The bull run coincides with foreign investors returning to Korean equities after years of underweight positions. While the 5,000-point target remains aspirational, market participants view it as symbolic of the administration’s commitment to elevating stock market performance. The focus now shifts to implementation of promised policies, with particular attention to whether the government can successfully bridge Korea’s valuation gap with global peers.
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