The KOSPI index rebounded in January for the first time in seven months. The onset of Donald Trump's second term as U.S. president and the emergence of the Chinese artificial intelligence startup DeepSeek helped avoid a record seven consecutive months of decline seen during the 1997 IMF currency crisis. The KOSDAQ index also succeeded in closing higher after six months.

The KOSPI index closed at 2,517.37 on the 31st. It rose 4.85% (116.5 points) compared to the opening value of 2,400.87 earlier this month. The last time the KOSPI index rose on a monthly basis was June of last year.

On Oct. 31, the stock market closing prices are displayed on the electronic board in the dealing room of Hana Bank's headquarters in Jung-gu, Seoul. /Courtesy of News1

The KOSPI index declined for six consecutive months from July to December last year. This marked the first time the KOSPI index fell for six months in a row since the IT bubble burst in 2000 and the global financial crisis in 2008. Concerns over sluggish semiconductor conditions along with the December 3 martial law incident prevented a rebound.

However, this month saw a shift as stock prices rose in sectors such as machinery and equipment, shipbuilding, energy, and robotics within the KOSPI market. The significant stock price increases of Hanwha Ocean, LS ELECTRIC, HANMI Semiconductor, and Doosan Enerbility stood out.

The KOSDAQ index also saw a rebound after a long time. Starting at 678.98 this month, the KOSDAQ index closed at 728.28, marking the first bullish candlestick in seven months. The KOSDAQ index surged by 1.83% (12.2 points) at the end of last month, barely recording flat performance. Although it avoided a continuous decline, it was the first time the KOSDAQ index rose on a monthly basis since June of last year.

While both KOSPI and KOSDAQ indices have halted their downward trends, it is not easy to be optimistic. There is a possibility that the tariff policies of the Trump administration will be fully implemented from next month. Additionally, the rise of DeepSeek has raised doubts surrounding investments in AI infrastructure.

Next month, key variables affecting the domestic stock market include how the market perceives demand for AI semiconductors, whether U.S. price trends maintain a slowdown, and whether Korean exports will rebound.

Yang Il-woo, a researcher at Samsung Securities, noted, "The Korean stock market may see an increase due to the expectation that the downward revision of profit forecasts could end if only the export indicators are strong, given that valuations are attractive."