Seoul's main stock index surged past 5,000 points for the first time in history on Thursday, a striking milestone achieved as South Korea navigates its deepest political crisis in decades.
The KOSPI (Korea Composite Stock Price Index) closed at 5,012.34, marking a 2.1 percent gain and shattering the psychological barrier that has eluded the market for years. The breakthrough comes barely a month after President Yoon Suk Yeol's impeachment over his short-lived martial law declaration plunged the nation into constitutional turmoil.
The disconnect between political chaos and market euphoria reflects a fundamental shift in how investors view South Korea's economic fundamentals. While the National Assembly debates impeachment proceedings and prosecutors investigate the former president, foreign and institutional investors have been pouring capital into Korean equities at record pace.
Analysts attribute the rally to several converging factors. South Korea's semiconductor sector—led by Samsung and SK Hynix—continues to benefit from the global AI boom, with memory chip prices stabilizing after a two-year downturn. The won's recent depreciation has also made Korean exports more competitive, particularly in key markets like China and Southeast Asia.
"Political risk is being priced as temporary, while the economic fundamentals remain solid," according to Chosun Ilbo's market analysis. "Investors are betting that whoever emerges from this crisis will maintain the export-focused policies that have driven growth."
The milestone is particularly notable given the timing. Just six months ago, the KOSPI languished below 4,500 as concerns about China's economic slowdown and rising U.S. interest rates weighed on sentiment. Thursday's close represents a gain of more than 11 percent since October.
Yet the rally masks deeper structural challenges. 's economy contracted 0.3 percent in the fourth quarter of 2025, according to Bank of Korea data released the same day, marking the first quarterly contraction in six months. Consumer spending remains weak as households grapple with high debt levels and inflation that, while moderating, continues to erode purchasing power.
