7% rebound follows plunge, as JPMorgan turns more bullish
South Korean stocks rebounded sharply Tuesday as investors looked past heightened volatility. The Kospi jumped more than 6 percent to close at a record high, just a day after an equally sharp slump dragged the benchmark back below the 5,000 mark.
The Kospi finished at 5,288.08, up nearly 7 percent and marking its highest close on record. The index opened 3.3 percent higher at 5,114.81 and extended gains through the session, ending at the day’s high, just 33.6 points, or about 0.6 percent, short of the intraday record of 5,321.6.
Surging demand prompted the exchange operator to trigger a buy-side sidecar about 30 minutes into the session, the first such halt in around 10 months. Sidecars are activated when Kospi 200 futures swing more than 5 percent for over a minute, automatically suspending program trading for five minutes.
The rebound followed a steep sell-off in the prior session, when spillover from US markets sent the Kospi down more than 5 percent to 4,949.67, its first close below 5,000 in five days, and triggered a sell-side sidecar.
Foreign and institutional investors reversed course after several sessions of net selling, helping lift the benchmark. Foreigners bought about 700 billion won ($484.2 million) of Kospi shares, while institutions snapped up roughly three times that amount. Retail investors, by contrast, broke a four-day buying streak, unloading nearly 3 trillion won.
Advances extended across sectors, with heavyweight stocks recovering most of their previous session’s losses. Samsung Electronics climbed more than 11 percent to a record 167,500 won, while its chip rival SK hynix rose over 9 percent to reclaim the 900,000 won level.
The sharp swing comes after a blistering start to the year for Korean equities. The Kospi has gained about 26 percent so far in 2026, adding more than 1,100 points and climbing almost uninterrupted until last week, when it touched a record intraday high of 5,321.68.
The rally has triggered a fresh round of target upgrades from brokerages, signaling rising confidence that the upswing still has room to run.
JPMorgan delivered the most bullish call so far on Tuesday, setting a 7,500 upside scenario for the Kospi and lifting its base case target to 6,000, up from its October projections of 5,000 and 6,000, after the benchmark broke above the 5,000 milestone last week.
In a report titled “Firing on All Cylinders,” the bank said Korea’s rally is being underpinned by broadening earnings momentum beyond semiconductors. While Samsung Electronics and SK hynix have accounted for about 60 percent of gains since September on tightening memory supply and rising prices, “other drivers of the market are delivering as well,” it said, pointing to long-term industrial growth areas such as defense, shipbuilding and power equipment that continue to post more than 20 percent earnings growth.
JPMorgan also highlighted sharply rising profit expectations as a key support.
Consensus forecasts for MSCI Korea’s 2026 earnings have climbed about 60 percent over the past six months, led by strong upgrades in technology stocks, the bank said. Spot memory prices remain “well above” contract levels, it added, with Samsung and SK hynix earnings seen coming in at about 40 percent above current expectations next year, implying up to 50 percent further upside for the two chipmakers.
The bank pushed back against concerns that governance reform momentum has stalled, arguing that the focus is shifting from legislation to execution.
“The real impact will come from diligent execution and sustained vigilance,” the report said, citing upcoming catalysts including possible Commercial Code revisions, shareholder return announcements ahead of the March annual meeting season and pending dividend tax reforms.
JPMorgan added that still-light investor positioning, marked by muted foreign inflows and limited participation from domestic institutions and retail investors, leaves “the potential for further outsized gains despite occasional pullbacks.”
Other brokerages have also turned more optimistic. Daeshin Securities on Monday lifted the top end of its first half 2026 trading range to 5,800 from 5,300, while Goldman Sachs raised its year-end outlook last month to 5,700 from 5,000.
Meanwhile, the tech-heavy Kosdaq also rebounded from the previous day’s slump, closing at 1,144.33, up 4.2 percent on the day. Institutional investors were the sole net buyers in the secondary market, purchasing about 860 billion won.
The local currency also showed signs of stabilizing, strengthening below 1,450 per US dollar, about 18.9 won firmer than the previous session, before ending onshore trading around 1,445.
jwc@heraldcorp.com
