South Korea's Kospi Breaks Above 5000 for the First Time

By Kwanwoo Jun

South Korea's stock market benchmark breached 5000 for the first time, burnishing its reputation as one of the world's best performing markets, with gains led by chip and battery companies.

The benchmark Kospi rose more than 2% to hit a record 5019.54 in early trade Thursday before paring some gains.

President Lee Jae Myung at his inauguration last year had pledged reforms aimed at boosting the local equities market above the 5000 level.

Since taking office in June, Lee has introduced reforms and investor-friendly tax measures aimed at addressing the so-called "Korea discount," referring to the undervaluation of domestic stocks when compared with global peers.

The Kospi has strengthened over 18% so far this year after surging 76% in 2025.

Thursday's rally was largely led by semiconductor stocks, including index heavyweight Samsung Electronics and Nvidia-supplier SK Hynix. They were recently higher by 3.8% and 2.8%, respectively, tracking the overnight rally in U.S. chip stocks.

Korean battery stocks were also sharply higher, with Samsung SDI jumping 16% and LG Energy Solution climbing 4.9%.

Gains on Wall Street were propelled by an easing of tensions between the U.S. and Europe after President Donald Trump ruled out the use of force to take control of Greenland and backed away from his threats of new tariffs against several European nations.

Investor sentiment didn't appear to be dampened by news before the market opened of a weaker than expected economic performance in the fourth quarter of 2025.

South Korea's economy contracted 0.3% compared with the quarter before, after growing a revised 1.3% in the third quarter.

Traders shrugged off the downbeat data on expectations that the economy remains on course to recover this year.

"Firmer household spending suggests the recovery in consumption will support economic expansion in 2026," Moody's Analytics economist Dave Chia said in a note. "Easing inflation, steady wage gains, accommodative monetary policy, and fiscal measures should bolster domestic demand."

Chia expects the country's exports to continue to be supported by strong semiconductor shipments that helped its trade engine hold up in 2025.

The South Korean government expects the economy to grow 2.0% in 2026 following an estimated 1.0% expansion in 2025.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

January 22, 2026 00:19 ET (05:19 GMT)