Evaluating the Kospi bull market duration as South Korea’s benchmark surges past key technical resistance levels.
South Korea’s Kospi has staged a swift turnaround, re-entering technical bull market territory as investors return to the index-dominating semiconductor giants.
The benchmark has surged more than 20% from its July trough crossing the standard threshold for a technical bull market reversing last month’s steep drawdown triggered by leveraged unwinds and forced liquidations.
The rapid reversal highlights the intense volatility in technology equities, raising a fundamental question: How much runway does South Korea’s rally actually have left?
For market bulls, sustained momentum relies on whether earnings from South Korea’s semiconductor giants can match rising expectations. Strong U.S. tech results and ongoing corporate commitments to AI infrastructure have helped reinforce confidence in long-term memory chip demand.
“The AI rally and sustained earnings growth remained constant throughout the recent sell-off, showing that market fundamentals rather than speculative sentiment
are restoring stability,” said Peter Kim, head of global investment strategy at KB Securities.
Kim noted that earnings and valuations remained sound throughout the semiconductor slump, which was primarily driven by technical pressure and capital outflows. With forced liquidations now cooling thanks to tighter regulatory rules and brokerages normalizing margin requirements the market may be built on a much sturdier foundation than it was prior to the crash.
Because the Kospi relies heavily on just a handful of semiconductor companies, its bull run remains highly vulnerable to sudden shifts in market sentiment around AI.
“South Korea’s stock market has effectively become synonymous with the global AI hardware trade,” said Phillip Wool, head of research at Rayliant Global Advisors.
According to Wool, the rebound was partly technical driven by fading forced liquidations, opportunistic dip buying, and FOMO. However, stronger-than-expected Big Tech earnings have also validated ongoing AI infrastructure spending, driving upward revisions to growth forecasts for Korean hardware suppliers.
“Any headline that threatens this narrative whether it’s conservative capex guidance from hyperscalers, declining token prices, or Fed rate fears could trigger a pullback,” Wool warned. “Expect ongoing volatility as long as the long-term outlook for AI hardware spending remains uncertain.”
Supporting the bull case, Global X ETFs investment strategist Billy Leung highlighted South Korea’s corporate governance reforms and “Value-Up” initiative, which have helped narrow the long-standing “Korea discount.”
The “Korea discount” describes the persistent valuation gap in which South Korean equities trade at lower earnings and book-value multiples than their global peers.
“The KOSPI is officially back in a bull market, but the central question is whether this rally reflects genuine corporate fundamentals or speculative momentum,” Leung noted.
While Leung sees South Korea’s market as grounded in corporate fundamentals supported by rising semiconductor earnings rather than pure speculation he warns that retail exuberance, heavy index concentration, and aggressive price targets are beginning to signal late-cycle behavior.
See also: Kospi Move From Bear To Bull- Market Territory on AI Market in Just a Month
Other analysts warned against overinterpreting the 20% threshold. “I would be cautious about declaring this a brand-new bull market,” said Jung In Yun of Fibonacci Asset Management Global, framing the surge as a combination of technical relief from forced liquidations and a “genuine return of stability”.
His baseline scenario anticipates the broader upward trend will persist supported by semiconductor earnings and recovering risk appetite though at a more moderate, uneven pace. “Following such a sharp rebound, period of consolidation would be healthy, and investors shouldn’t expect prices to continue rising at this velocity.”
