SEOUL, Jan 22, 2026, 16:02 (KST)
- Kospi crosses 5,000 in early trade, hitting a record 5,019.54. 1
- Trump withdraws a tariff threat linked to Greenland, prompting a relief bid in risk assets. 2
- South Korea’s GDP shrank 0.3% in the October-December quarter. 3
South Korea’s benchmark KOSPI topped 5,000 points for the first time on Thursday, rising as much as 2.2% to 5,019.54. Samsung Electronics and SK Hynix led the move, while Hyundai Motor traded at a record. “The bullish market trend this time is a fundamentals-driven one based on earnings growth,” said Kim Jae-seung, an analyst at Hyundai Motor Securities. 4
The index is up about 19% so far this month after a 76% jump in 2025 — its biggest annual gain since 1999 — and the run has become a political and market marker for President Lee Jae Myung’s “KOSPI 5,000” pledge. Lee has pushed tax and market measures aimed at narrowing the “Korea discount”, the tendency for local stocks to trade at lower valuations than overseas peers, often blamed on weak governance and low dividends. 5
Markets across the region steadied after U.S. President Donald Trump dropped tariff threats tied to Greenland and ruled out using force, a shift that helped pull money back into stocks. “The TACO, as they call it, is certainly real,” said Damian Rooney, director of institutional sales at Argonaut in Perth, using Wall Street shorthand for “Trump Always Chickens Out.” 6
In Tokyo, the Nikkei 225 rose 1.9%, with SoftBank Group up 11% and Tokyo Electron up 3.7%. Hong Kong’s Hang Seng and China’s Shanghai Composite slipped, while Taiwan’s Taiex jumped 2%. 7
In Seoul, investors piled into chipmakers on expectations that tighter supply and strong AI demand could keep memory prices firm. Samsung and SK Hynix gained between 3% and 4% in morning trade, while Hyundai extended a sharp January run as investors talked up “physical” AI — software moving into machines such as cars and robots — and ANZ analysts said growth should improve in coming months as AI-linked exports rise and construction rebounds. 8
But South Korea’s economy unexpectedly shrank 0.3% in the fourth quarter from the previous quarter, missing forecasts for a small rise, as investment and exports weakened. Bank of Korea official Lee Dong-won pointed to a softer-than-expected recovery in construction investment, while Moody’s Analytics economist Dave Chia said rate cuts in early 2026 “appear unlikely” with the won under pressure. 9
The market rally has run alongside a push to tighten corporate governance and lift shareholder returns. Revisions to South Korea’s Commercial Act now require directors to consider all shareholders’ interests, and tax incentives are being used to encourage higher dividends, the Financial Times reported. 10
Trade policy remains a live risk for the chip-heavy index. U.S. Commerce Secretary Howard Lutnick has said South Korean and Taiwanese chipmakers could face tariffs of up to 100% unless they commit to more production on American soil, and Lee said the sector’s “80 to 90%” dominance would likely push higher costs onto U.S. prices. 11
Hyundai’s push into humanoid robots is also drawing resistance at home even as the theme fuels the stock. In an internal letter reviewed by Reuters, the company’s labour union warned that humanoid robots would bring “employment shocks” and said “not a single robot … will be allowed” without labour-management agreement; Hyundai did not immediately comment. 12
The relief move was not limited to Seoul. Indian shares rose as global equities bounced, with the Nifty 50 up 1.09% and the Sensex up 1.03% by mid-morning, and Geojit Investments’ VK Vijayakumar said, “The message that the U.S. would refrain from imposing tariffs on Europe takes away the threat of a U.S.-Europe trade war.” 13
