Joon Seok

Korea's equity market is moving from a sharp correction toward a more durable recovery. KOSPI's forward price-to-earnings ratio fell below five times, its lowest level since 2004, and the capitulation index dropped to -2.53, a level often marking troughing territory outside major crises. Forced selling is easing: leveraged single-stock ETF assets fell about 70% from the June peak, margin lending is down, and hedge funds have completed roughly three-quarters of a typical risk reduction cycle. He maintains a KOSPI target of 9,000 by June 2027, with a bull case of 10,500 and a bear case of 5,500.

Technology remains central to Korea's equity recovery because AI infrastructure continues to drive demand for advanced memory. Morgan Stanley Research expects global spending by large tech platforms to reach $85 billion in 2026 and $1.2 trillion in 2027, creating significant opportunity, though it keeps markets sensitive to capital spending changes, chip pricing, and competition.

The next phase of Korea's market should be steadier and more balanced, with industrials, financials, healthcare, communications, and consumer staples contributing alongside technology rather than a tech-only rebound.