South Korea’s stock market is enjoying a historic rally, with the KOSPI index smashing through the 6,000-point milestone for the first time ever on February 25, 2026. The surge, fueled by semiconductor optimism and a wave of investor enthusiasm, has left market watchers both exhilarated and cautious. Meanwhile, the KOSDAQ, South Korea’s tech-heavy secondary exchange, is seeing renewed interest as government policies and shifting investor sentiment push it into the spotlight—though not without controversy over valuations and fundamentals.
At 9 a.m. KST on February 25, the KOSPI opened at 6,022.70 points, up 53.06 points (0.89%) from the previous day, and climbed as high as 6,039.18 during the session, according to the Korea Exchange. This marked a watershed moment for the index, which had started the year around 4,200 points—a more than 40% leap in less than two months. Individual investors were the main buyers, net-purchasing 3,801 billion KRW, while foreign and institutional investors sold off 2,935 billion KRW and 927 billion KRW, respectively (Industry News).
The KOSPI’s rally is closely tied to the global semiconductor boom. SK Hynix’s share price vaulted past 1,000,000 KRW for the first time, earning it the coveted ‘king stock’ status, while Samsung Electronics hit 200,000 KRW. Analysts expect Samsung’s operating profits to reach between 180 trillion and 200 trillion KRW in 2026, with memory prices rising and AI infrastructure investments accelerating. Nomura Financial Investment even projected the KOSPI could reach 8,000 points, while Kiwoom Securities raised its year-end target to 7,300 points, citing low valuation burdens and strong earnings momentum (Maeil Business News, Industry News).
Yet, not everything is rosy. The rapid ascent has sparked worries about overheating and short-term volatility. An anonymous researcher warned, “Nearly 40% gains since the start of the year, combined with tariff uncertainties and U.S. tech earnings, could lead to profit-taking pressure.” The market’s ‘FOMO’—fear of missing out—is palpable, especially among retail investors. As KOSPI’s price attractiveness wanes, some are shifting leveraged investments (so-called ‘debt trading’) to the KOSDAQ, where prices are seen as more accessible (Maeil Business News).
The KOSDAQ, for its part, has risen a robust 25.88% this year, climbing from 925.47 points to 1,165.00 by February 25 (Newsis). Still, this lags behind KOSPI’s 40% jump, prompting market participants to speculate about the possibility of the KOSDAQ hitting the much-hyped ‘Samcheon-Dak’—the 3,000-point level. Government support is a key driver here. Measures include K-tech promotion, IPO activation, expanded tax incentives, and new scale-up support funds, all designed to boost liquidity for small and mid-cap stocks. The inclusion of the KOSDAQ in pension fund evaluation criteria is also expected to channel more institutional passive investment into the market. Stricter delisting standards are being implemented to weed out ‘zombie companies,’ improving overall market reliability (Newsis, Korea Exchange, Yonhap Infomax).
“The KOSDAQ market is securing upward momentum, thanks to government policy support and strong institutional demand,” said Seol Tae-hyun, a researcher at DB Securities. “The revised pension fund evaluation guidelines and swift removal of underperforming companies will enhance the financial credibility of KOSDAQ 150 stocks.”
Despite these efforts, skepticism persists. On February 25, the KOSDAQ index opened at 1,174.27, up 9.27 points (0.80%) from the previous day (News1). But many experts warn that the KOSDAQ’s high valuation is not supported by robust earnings. Top stocks like Ecopro and Samchundang Pharmaceutical are showing negative or sky-high price-to-earnings ratios (PER)—Ecopro BM’s expected PER for 2026 is a staggering 1,178 times, and Samchundang’s earnings projections extend out to 2032 with no clear target price. “Currently, KOSDAQ is a market without numbers,” said one research center chief. “All that’s left is policy expectations and passive ETF inflows.” (Yonhap Infomax)
The government’s push to invigorate the KOSDAQ has also led to a boom in ETF trading. Samsung Asset Management’s ‘KODEX KOSDAQ150’ ETF saw its listed units surge 239.8% in just one month, from 104.6 million to 355.45 million units. The leveraged version, ‘KODEX KOSDAQ150 Leverage,’ jumped 85.4% to 260.9 million units. Individual investors poured nearly 5 trillion KRW into these two ETFs during that period. Even the ‘KODEX KOSDAQ150 Futures Inverse’ ETF, which bets on declines, saw an 11.7% increase in listed units as some investors hedged against a potential correction (Korea Exchange).
But this flood of money into high-risk, high-reward products has raised red flags. “An increase in ETF listed units means more active buying, but also brings risks,” noted an asset management executive. “Too much concentration in leveraged and inverse ETFs could lead to big losses if the market turns. And with KOSDAQ’s focus on volatile small and mid-cap stocks, the downside risk is even higher.”
Political voices are weighing in as well. Oh Ki-hyung, chairman of the Democratic Party’s K Capital Market Special Committee, publicly rejected the use of the term ‘Samcheon-Sdak’ and called for a focus on restructuring unprofitable companies and improving governance transparency. “The real issue for KOSDAQ now is cleaning up companies that don’t generate profits,” he said, questioning the motives behind hyping the 3,000-point target (Yonhap Infomax).
Meanwhile, the broader economic environment continues to play a role. The U.S. stock market closed higher on February 24, with the Dow Jones, S&P 500, and Nasdaq all posting gains. This positive global sentiment, coupled with expectations for strong semiconductor earnings, has helped fuel South Korea’s market rally. On the currency front, the USD-KRW exchange rate opened at 1,441.6 KRW on February 25, down 0.9 KRW from the previous day, adding a sliver of support for local equities (Industry News).
As South Korea’s stock market navigates this period of record highs, the interplay between government policy, investor psychology, and corporate fundamentals will determine whether the rally can sustain itself—or if a reckoning awaits. For now, the mood remains buoyant, but the warnings are growing louder.