The day’s close of the benchmark Korea Composite Stock Price Index (KOSPI) is displayed on a screen ahead of an event to celebrate the KOSPI’s new record high, at the Korea Exchange on Oct. 27, 2025. (Yonhap)
SEOUL, Oct. 27 (Korea Bizwire) — South Korea’s benchmark stock index surged past the 4,000 mark for the first time on Monday, a milestone that has energized investors and set off new warnings that the market may be overheating.
The Kospi has soared nearly 18 percent in October alone, repeatedly setting record highs in recent weeks. Yet the velocity of the rally has brought sharp swings during the trading day, raising unease over whether the surge has outpaced fundamentals.
By midmorning Monday, the index was up 2.4 percent at 4,035.71, after briefly climbing to 4,038.39. Its intraday volatility this month has averaged 1.91 percent, the highest level in nearly five years, according to Korea Exchange data.
A similar spike has appeared in the Kospi 200 Volatility Index, sometimes called Korea’s fear gauge. The index has jumped more than 57 percent since late September, reaching its highest reading since global markets convulsed following a trade announcement by former President Donald Trump in April.
The combination of record highs and rising volatility has led some investors to question whether the market is running too hot. But many analysts say South Korean equities remain relatively inexpensive by global standards and could continue climbing over the longer term, supported by government efforts to reduce what has long been termed the “Korea discount.”
The bull statue installed in front of the Korea Exchange (Image courtesy of Yonhap)
On Oct. 24, Kospi-listed companies traded at a price-to-book ratio of 1.32 and a price-to-earnings ratio of 18.2 — elevated compared with recent years but still not excessive in international comparison.
“Only the shares with solid justification are really rising,” said Heo Jae-hwan, a researcher at Eugene Investment & Securities. “We are not at a bubble phase yet.”
Still, the rally has been concentrated in a small cluster of big names, particularly Samsung Electronics and SK hynix — the twin engines of Korea’s semiconductor boom. Samsung shares have risen 81 percent since June, and SK hynix is up roughly 160 percent over the same period, leaving valuation gauges for both companies deep into what analysts describe as overheated territory.
Lee Kyung-min, a strategist at Daishin Securities, said the upward trend for the Kospi remains intact, but investors should be cautious about chasing prices higher.
“The fundamentals are improving,” he said. “That doesn’t eliminate the risk of sharp pullbacks along the way.”
Ashley Song (ashley@koreabizwire.com)
