This year the KOSPI index surged more than 75%, ranking No. 1 in returns among Group of 20 (G20) and Organisation for Economic Co-operation and Development (OECD) countries. In the first half, "jobangwon" ("shipbuilding, defense, and nuclear power"), which benefited from policies, led the market, while in the second half, large-cap semiconductor stocks riding the artificial intelligence (AI) boom drove the rally, producing an unprecedented bull run.
According to the Korea Exchange (KRX) on the 31st, the KOSPI index rose 75.67% this year. It closed out the year at 4,214.17 points on the last trading day, on the 30th. Market capitalization also jumped, coming in at 3,478 trillion won, up 77.1% from the end of the previous year.
Korea's stock market took its first steps heavily at 2,398.94 on Jan. 2 this year, hit by the lingering effects of last year's political uncertainty. As investor sentiment cooled, it moved sideways around the 2,500 level through May, but with the launch of a new government in June, uncertainty cleared and a steep rebound began.
The star of the first half was "jobangwon," where policy benefits and expectations for earnings converged. In particular, after Donald Trump took office as U.S. president, as Korea-U.S. economic cooperation strengthened, shipbuilding stocks soared on the "MAGSA (Make American Shipbuilding Great Again)" momentum. Hanwha Ocean jumped more than 200% from the start of the year. Samsung Heavy Industries and HD Hyundai Heavy Industries also posted steep gains.
Defense and nuclear power stocks also delivered record returns, helped by heightened global geopolitical tension and a surge in energy demand. Defense names gained as geopolitical tensions expanded from the Russia-Ukraine war to Israel-Iran military clashes, and expectations grew for large export contracts by domestic defense corporations. Hanwha Aerospace in July topped 1 million won per share, joining the ranks of "emperor stocks."
Nuclear power stocks drew buying on expectations that electricity demand would surge as demand for AI data centers increases. Doosan Enerbility, buoyed by expectations for nuclear exports to the Czech Republic, posted a staggering 316% gain from the start of the year.
In the second half, the AI supercycle dominated the market. In particular, as demand for memory semiconductors exploded, expectations for Samsung Electronics and SK hynix gradually grew.
With large-cap semiconductor leaders, the top two on the main board—Samsung Electronics and SK hynix—pulling the index, the KOSPI in November topped the 4,200 level for the first time ever. Samsung Electronics surged 124% from the start of the year, and SK hynix soared 280%. On the last trading day of the year, the previous day, the two stocks also hit fresh intraday record highs, crossing 120,000 won and 650,000 won, respectively.
In the securities industry, the view is that a favorable, semiconductor-centered environment will continue next year. Lee Seung-woo, a researcher at Eugene Investment & Securities, said, "Although the AI bubble debate continues and market fatigue is accumulating, expectations for memory makers' earnings are rising," adding, "The DRAM capacity (capa, production capacity) burden of high-bandwidth memory (HBM) is three times that of general products."
He further projected, "Unless a sharp drop in HBM demand is observed, the supply shortage in memory semiconductors is unlikely to be resolved easily."