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Kospi breaks record for third consecutive session, but experts warn of market bottoming out

Published: 06 Jan. 2026, 19:08 Updated: 06 Jan. 2026, 19:43

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing on Jan. 6. [YONHAP]

The Kospi has been sprinting to fresh record highs in the new year, but critics warn that the rally is only half a boom since most of the gains have been concentrated in heavyweight semiconductor stocks.

The Kospi closed at 4,525.28 on Tuesday, up 1.52 percent from Monday, according to the Korea Exchange. The benchmark index opened 0.26 percent lower at 4,446.08 but turned higher in the afternoon as buying by retail investors picked up.

Over the first three trading sessions of the year — Friday's, Monday's and Tuesday's — the Kospi successively broke through the 4,300, 4,400 and 4,500 levels, setting a new all-time high each day.

Samsung Electronics and SK hynix, the two largest stocks by market capitalization, each fell about 2 percent in early trading but rebounded later in the session on Tuesday. At the close, Samsung Electronics rose 0.58 percent to 138,900 won ($96), and SK hynix surged 4.31 percent to 726,000 won. Samsung Electronics also briefly touched 140,000 won during the session.

Despite profit-taking centered on chipmakers — with foreign investors posting net sales of more than 1.4 trillion won in the electronics sector — expectations of further gains helped push prices higher.

Data analyzed by the JoongAng Ilbo using exchange figures shows that of the Kospi’s 311.31-point rise over the first three trading days of the year, Samsung Electronics accounted for 140.4 points and SK hynix for 68.16, meaning the two stocks together contributed nearly 70 percent of the increase.

The Kospi’s advance-decline ratio (ADR), which compares the number of rising stocks to falling ones over a 20-day period, also fell below 80 percent on Monday. The ADR slipped to 79.51 percent, the first time it has dropped below 80 percent since Nov. 24, 2025.

A screen in Hana Bank's trading room in central Seoul shows the Kospi opening on Jan. 6. [NEWS1]

The ratio has been below the neutral 100 percent mark since Dec. 24, 2025, indicating that declining stocks have outnumbered advancers. The lower the figure, the weaker the market’s overall breadth, with levels below 75 percent generally seen as a signal of a market bottoming out.

Economic policymakers have also voiced concerns about a K-shaped recovery, in which growth is driven by semiconductors while other sectors lag behind.

“Although Korea’s economy is expected to post a higher growth rate this year than the last, the gap between sectors under a K-shaped recovery will likely create a wide disconnect between headline growth and how people actually feel about the economy,” Bank of Korea Gov. Rhee Chang-yong said on Monday.

“Conditions in the real economy remain challenging, and the fundamental strength of industry is weakening, even as global competition in manufacturing grows fiercer,” said Minister of Trade, Industry and Resources Kim Jung-kwan, echoing the concern in his New Year’s address.

Seo Sang-young, a researcher at Mirae Asset Securities, warned that a prolonged K-shaped recovery could severely dampen domestic demand and consumption among the middle class and below.

A digital board in Hana Bank in central Seoul shows the Kospi opening lower on Jan. 6. [YONHAP]

“If questions emerge over AI profitability and the semiconductor cycle turns down, the stock market could plunge,” Seo said. “That could prompt even high-income earners, who have been supporting consumption, to cut back, raising the risk of a sharp economic downturn.”

Samsung Electronics experienced a similar boom-and-bust cycle from 2016 to 2017, when its share price surged on expectations of a semiconductor supercycle, only to collapse in 2018 as industry conditions deteriorated. Even so, FOMO, or a fear of missing out, is spreading across the market.

Online communities have been flooded with posts from long-term investors in Samsung Electronics and SK hynix sharing their gains, alongside comments such as “I’m breaking a 200 million won savings account to jump in” and “I’m putting all my assets into Samsung Electronics.”

KB Securities raised its target price for Samsung Electronics from 160,000 won to 180,000 won on Tuesday, forecasting that the company’s operating profit this year will triple from last year's.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY JANG SEO-YUN [[email protected]]