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Kospi Eyes 6,000: Rally Continues Amidst Caution
20 Jan
Summary
- The Kospi index has climbed for a 12th straight session, reaching new all-time highs.
- Market watchers advise caution due to poor breadth, currency plunge, and AI bubble fears.
- President Lee's pledge to drive Kospi toward 5,000 was a daunting task post-martial law.
The Kospi index continues its remarkable ascent, recently climbing for a 12th consecutive session to achieve another all-time high. This sustained rally has put the 6,000 level within reach, suggesting a potential further gain of 22%. Despite this impressive performance, some market strategists are urging caution.
Potential risks identified by analysts include deteriorating market breadth, a significant depreciation of the local currency, and growing concerns about an artificial intelligence bubble. These factors could pose challenges to the ongoing upward trend in South Korea's substantial $3 trillion stock market.
The market's focus on achieving significant index milestones, such as the 5,000 level previously targeted by President Lee upon his assumption of power last year, has intensified. This goal appeared particularly ambitious at the time, given the nation's recovery from a martial law declaration in December 2024, which exacerbated the 'Korea discount' linked to governance issues.
