The KOSPI index surged 4% driven by artificial intelligence and semiconductors... Looking forward to breaking through the 7,000-point mark

South Korea’s Composite Stock Price Index (KOSPI) broke through 6,800 points for the first time during trading on the 4th, rising by more than 4%. The Korean stock market showed a strong upward trend centered on semiconductor and artificial intelligence-related stocks.

According to data from the Korea Exchange, as of 11:43 a.m. that day, the KOSPI was up 4.22% from the previous trading day, closing at 6,877.16 points. The index opened at 6,782.93 points, up 2.79%, and after a brief fluctuation right at the open, the gain kept expanding. During the same period, the Korea Securities Dealers Automated Quotations (KOSDAQ) also rose 1.72%, closing at 1,212.88 points. There was even speculation in the market that the KOSPI could come close to 7,000 points in a single jump.

The drivers behind the stock market’s gains that day were synchronized buying by foreign investors and institutional investors. In the securities market, foreign investors net bought 27.413 trillion won, institutional investors net bought 1.5399 trillion won, while individual investors net sold 4.1818 trillion won, choosing to lock in profits. In particular, foreign investors net bought 2.6701 trillion won just in the electrical and electronic sector, concentrating their investments in large-cap semiconductor stocks. As a result, Samsung Electronics rose 4.08% from the previous trading day to close at 229.5 thousand won; SK Hynix surged 10.81% to close at 1.425 million won. During the trading session, Samsung Electronics once briefly rose to 230 thousand won, once again setting this year’s intraday high last recorded on April 30; SK Hynix also broke through its previous high, moving into the 1.4 million won range. Its intraday market capitalization also exceeded 1,000 trillion won.

The backdrop was the strong performance of the U.S. stock market during the holiday period. While South Korea’s stock market was closed on May 1 for Labor Day, the New York market continued rising, led mainly by technology stocks. The Dow Jones Industrial Average rose 1.62% on April 30 and fell 0.31% on May 1, but both the S&P 500 index and the Nasdaq Composite index posted gains for two consecutive days. The Philadelphia Semiconductor Index also rose by 2.26% and 0.87% in the last two trading days, respectively. In addition, as major U.S. tech companies including Alphabet (Google’s parent company), Meta, Amazon, and Microsoft released earnings that exceeded market expectations one after another, investors’ overall sentiment toward semiconductor and artificial-intelligence infrastructure-related companies further strengthened. In effect, the optimism that had emerged first overseas was reflected all at once in South Korea’s domestic market.

In the securities industry, this rally is interpreted as structural expectations brought on by the spread of AI investment, rather than merely a short-term rebound. A researcher at Shinhan Investment Corp., Kang Jin-hyuk, explained that for the first time in KOSPI history, the index broke through 6,800 points, and that the AI value chain as a whole, including semiconductors, is seeing a surge (prices rising sharply far beyond expectations). He assessed that foreign investors, who net bought in early April and then turned to net selling at the end of April, bought both spot and futures on the first trading day of May at the same time; meanwhile, KOSDAQ also rebounded across all sectors, including secondary batteries and biotech, based on the improved export outlook in April, pushing the index higher.

International developments also had a certain positive impact on the stock market. Since the latter half of last week, there have been reports that U.S. President Donald Trump is reviewing diplomatic and policy response options regarding the Iran incident, which eased concerns about another spread of tensions in the Middle East. In the early hours of that day, President Trump announced on social media operated by him that a so-called “Liberty Project” has been launched to rescue third-country vessels trapped in the Strait of Hormuz, but subsequent reports said that the U.S. military would not directly escort the ships, so the impact on financial markets was limited. In fact, the June-delivery West Texas Intermediate crude oil futures price on the New York Mercantile Exchange, which plunged 2.98% on May 1, rose only 0.07% compared with the previous trading day, closing at $102.01 per barrel. Under this trend, whether U.S. tech stocks’ performance holds up, whether foreign investors continue to buy, and how stable the situation in the Middle East remains are likely to determine the speed and extent of any further rise in South Korea’s stock market.