[Market Analysis] "The chart is too perfect, it's frightening"… The unstoppable KOSPI, is it a "bubble" or a "major upward trend"?

The recent trend chart of the Korean stock market seems as straight as if drawn with a ruler. The Korea Composite Stock Price Index (KOSPI) has approached a 15% increase since the beginning of the year. Faced with this vertical upward curve without any pullback correction, the securities industry in Yeouido even rumors of “a breathtakingly suspicious” situation.

Currently, the KOSPI is racing along on the “three horses” of the AI (Artificial Intelligence) boom, corporate value enhancement (stock buybacks), and a friendly macroeconomic environment. However, technical indicators have already shown “overheating” signals. Is this the night before a bubble burst, or the starting point to fully ride the super cycle? This article analyzes the bright and dark sides of the current market in the style of JoongAng Daily.

◇ “The King Returns”…Goldman Sachs says “Korean market still in a state of hunger”

Last year, the KOSPI ranked among the top in the global stock market performance list, and in 2026, it continued to rise on the momentum. The current KOSPI has broken through the upper trend channel, with the Relative Strength Index (RSI) far exceeding 70 in the overbought zone, trading near 85. According to conventional technical analysis, this is already in the “overbought (short-term surge)” zone.

But global investment banks (IBs) have a different perspective. Goldman Sachs recently reported that “based on the dazzling performance of the Korean stock market in 2025, it will continue to maintain strong growth in 2026,” and projected an annual total return in USD terms of 23%.

They clearly list the driving forces behind the rise of the Korean stock market: ▲ Continuous equipment investment in ultra-large data centers leading to semiconductor (DRAM·NAND) supply shortages and profit surges ▲ Gains from geopolitical risks affecting Korean industrial products ▲ Steady progress of government-led corporate value enhancement plans. Additionally, the expected interest rate cuts in Q2 2026 and the trend reversal of the Korean won's strength in the second half of the year are also positive “tailwinds” for foreign capital supply and demand.

◇ KOSPI with "Copper Doctor"同行…valuation pressure still exists

This is not just a rise driven by expectations. The upward trend of copper prices, known as the “thermometer of the real economy,” can serve as evidence. Historically, the profits of KOSPI companies have always shown a high correlation with copper prices. Rising copper prices indicate a global manufacturing revival, which will directly boost the performance of export-driven Korean companies.

Regarding concerns that “such a rapid rise may be overvalued,” the data's answer is “not yet.” The Korea stock market's P/E ratio remains at a historical average level. Compared to emerging markets (EM) or developed markets (DM), it is still at a discount (Korea Discount). Although recent foreign capital inflows continue, analysis of capital flow data shows that experts generally believe it has not yet reached the “overcrowded” stage.

◇ Samsung Electronics' “Short Squeeze” and the exchange rate warning lights

Of course, the market is not only optimistic. Signals that investors need to be cautious about are also emerging in multiple areas.

The most notable is Samsung Electronics' surge. Recently, riding the wave of AI semiconductor boom, Samsung Electronics' stock price soared, even showing a “short squeeze” situation where short sellers buy back stocks urgently to reduce losses. Samsung Electronics' RSI has reached its highest level since 2021. No matter how high-quality a stock is, if it surges in the short term, the pressure to take profits will inevitably increase.

The exchange rate is also an unstable factor. The Korean won has fallen to its lowest level since the global financial crisis. Some analysts point out that domestic investors expanding overseas investments (the Korean retail investors' overseas stock trading craze) have intensified the weakness of the won. Exchange rate fluctuations may stimulate foreign investors' concerns about exchange losses, leading to supply and demand imbalances.