South Korea’s KOSPI surged approximately 68% during the second quarter of 2026, its best quarterly performance since the nation rebounded from the Asian financial crisis in 1998. The benchmark climbed from around 5,000 to over 9,000, recording all-time highs in June. Year-to-date gains now approach nearly 100%.
Samsung Electronics and SK Hynix are the primary engines of this rally. Analyst projections indicate these two semiconductor giants will drive between 52% and 68% of total KOSPI profit growth. The surge reflects a global scramble for high-bandwidth memory, the specialized chips essential for artificial intelligence infrastructure. The two firms are among only three companies worldwide capable of manufacturing this technology at scale.
Beneath the historic returns, market volatility has spiked dramatically. The index has already recorded 20 single-day moves exceeding 5% in 2026. The most severe of these occurred on June 23, when the KOSPI plummeted 9.99% following regulatory warnings about leveraged ETFs that became wildly popular among domestic retail traders.
Despite the generational returns, foreign investors have been net sellers, offloading tens of billions of dollars in Korean equities. Much of this outflow is attributed to mechanical rebalancing by passive funds trimming positions as constituent weights grow. The rally is increasingly a local phenomenon, fueled by domestic investors often using leveraged products.