South Korea’s Kospi races from 7,000 to record 8,000 in seven sessions

[SEOUL] South Korea’s benchmark stock index briefly breached the 8,000 mark for the first time on Friday (May 15), just seven sessions after it reached the 7,000 milestone.

While the market turned lower soon after hitting the record, the speed of the rally underscores the strong momentum that saw the Kospi Index surging from 5,000 to 8,000 this year. By contrast, it took more than 18 years for the benchmark to climb from 1,000 to 2,000, and another 13 years to reach 3,000.

Chipmakers Samsung Electronics and SK Hynix, major beneficiaries of the AI infrastructure boom due to their dominance in memory chips, have led the advance.

The Kospi has almost tripled over the past year, raising questions over whether corporate earnings and AI-related spending can continue to justify the market’s rapid ascent. Underscoring brewing jitters, foreign funds have been selling everyday this week.

Still, bulls point to valuations as support for further gains. The Kospi trades at 8.6 times forward earnings, versus 21.2 times for the US benchmark S&P 500 Index.

“To believe there is a bubble, you have to believe the amount of money the AI giants are spending is unsustainable,” said Ian Samson, a portfolio manager at Fidelity International. “Essentially all their free cash flow, and more, is now pouring into the arms race to build out AI infrastructure. For now, there is good visibility that the end is not imminent.” BLOOMBERG