hankyoreh

A person snaps a photo of a banner outside the Korean Exchange commemorating the KOPSI benchmark index breaking 5,000 for the first time in history on Jan. 22, 2026. (Ryu Woo-jong/Hankyoreh)

For the first time in its 46-year history, South Korea’s benchmark KOSPI index broke 5,000 during trading. The Korean economy, however, barely eked out a yearly growth rate of 1% as it contracted in the fourth quarter of 2025. Korea now faces the difficult task of overcoming an uneven, K-shaped economic recovery.
 
On Thursday, the KOSPI opened at 4,987.06 on the Korea Exchange, up 1.57% (77.13 points) from the previous session. Surging past the 5,000 mark for the first time in its history early in the session, the index hit an intraday high of 5,019.54. 

The index fluctuated around the 5,000 mark before profit-taking in the afternoon brought it back down to 4,952.53, ending the week up 0.87% (42.60 points) from the previous session. While falling slightly short of the 5,000 mark, the index closed at a record high.
 
Samsung Electronics, the company with the highest market cap, briefly hit 157,000 won during trading before closing at 152,300 won (up 1.87%), pushing its combined market cap for common and preferred shares past 1 quadrillion won for the first time in history for a single company. SK Hynix shares also rose 2.03%.
 
The KOSPI, short for Korea Composite Stock Price Index, has been on an unrivaled roll since the beginning of the year, rising for 14 days since Jan. 2, excluding Jan. 20. Since closing trading for 2025 on Dec. 30 at 4,214.17, the index has surged 17.54% — the highest among the major stock indexes of 40 major countries.
 
The KOSPI has more than doubled in a little less than a year. After hitting a record low in April 2025 (2,293.70), it surged to break the 4,000-mark on Oct. 27, only to break another ceiling in approximately three months by hitting the 5,000-mark during trading.

 
During this period, the Korean stock market steadily pushed up the index by continuing rotational trade patterns driven by large-cap stocks such as semiconductors, defense, shipbuilding, nuclear powers, automobiles and robotics. For instance, when semiconductor stocks plateaued amid weakness in US tech stocks, buying interest shifted to automotive and robotics stocks. In 2025, the KOSPI was ranked first among the benchmark indices of the Group of 20 and OECD member countries for its increase of 75.6%. Over the same period, Japan’s benchmark index rose 27%, China’s 18%, and the US’ 17%.
 
However, this has led to an intense concentration phenomenon, with mid- and small-cap stocks being relatively neglected. 

“During the sharp surge at the beginning of the year, the number of declining stocks exceeded the number of rising stocks. This suggests the stock rally was concentrated in only a few sectors like semiconductors, shipbuilding, defense and automobiles,” assessed Han Ji-young, a researcher at Kiwoom Securities.
 
While Korean stocks have hit record highs, the Korean economy contracted in the fourth quarter of 2025, barely achieving an annual growth of 1%, the lowest level of growth since the COVID-19 pandemic. Data from the Bank of Korea reveals that the flash estimate for real GDP growth in the fourth quarter of 2025 (quarter-on-quarter) was -0.3%.
 
Quarterly growth contracted in the first quarter of 2025, rebounded in the second quarter (0.7%), rose significantly in the third (1.3%), only to contract again in the fourth. The fourth-quarter growth rate is the lowest in three years, since the fourth quarter of 2022 (0.4%). The annual growth rate, 1.0%, for 2025 was rounded up from the second decimal space (0.97%).

By Kim Hoe-seung, senior staff writer

Please direct questions or comments to [english@hani.co.kr]