South Korean financial markets opened the 2026 trading year on a powerful note, with the benchmark KOSPI index scaling a fresh record peak. The surge was fueled by sustained investor optimism following robust export data, even as the local currency, the won, softened against the US dollar and bond yields retreated.
Record-Breaking Rally for KOSPI
The benchmark KOSPI jumped 23.18 points, or 0.55%, to reach 4,237.35 by 01:33 GMT on Friday. This milestone extends a phenomenal run for the index, which in 2025 registered its most significant annual gain in over twenty years. The historic rally has been powered by a boom in chipmaker stocks, linked to the global artificial intelligence frenzy, and market-friendly reforms introduced by the new government.
Leading the charge among heavyweight constituents, Samsung Electronics soared 3%, while its rival SK Hynix advanced 0.77%. However, the session was not uniformly positive. Battery giant LG Energy Solution saw its shares dip by 1.63%, and automaker Kia Corp declined 1.48%. Hyundai Motor's stock ended flat, and biopharmaceutical firm Samsung BioLogics edged down 0.65%.
Market breadth was mixed, with 409 stocks gaining ground against 469 that declined out of a total of 924 traded issues. Notably, foreign investors were net sellers, offloading shares worth 152.1 billion won.
Won Weakens Amid Central Bank Commentary
In the currency market, the South Korean won lost ground against the US dollar. On the onshore settlement platform, the won was quoted at 1,440.3 per dollar, marking a 0.06% decrease from its previous close of 1,439.5. In offshore trading, it was quoted at 1,440.1 per dollar, though it showed a slight daily gain of 0.2%.
Commenting on the currency's level, the chief of South Korea's central bank remarked that the recent dollar-won rate in the high-1,400 range appeared disconnected from the nation's economic fundamentals. He attributed part of this weakness to increased local investment in overseas equity markets.
Strong Exports and Falling Bond Yields
The bullish sentiment in equities was underpinned by stellar trade performance. Government data released on Thursday showed South Korea's exports grew in December for the seventh straight month, culminating in a record-breaking 2025 where exports surpassed $700 billion for the first time in history.
In the debt market, bond yields moved lower. The yield on the most-liquid three-year Korean treasury bond fell by 2.4 basis points to 2.927%. Similarly, the benchmark 10-year yield dropped by 1.6 basis points to 3.369%.
The simultaneous rise in equities, weakening of the won, and fall in bond yields paint a complex picture of the South Korean financial landscape as it steps into the new year, balancing domestic strength with global capital flows.
