South Korea's main stock index shattered the 7,000-point barrier for the first time Wednesday, closing at a record 7,384.56. The KOSPI surged 6.45% in a single session, pushing its year-to-date gain to roughly 75% after an already blistering 76% rally in 2025 — its strongest annual performance since 1999.
The AI hardware windfall
Global demand for artificial intelligence hardware continues to supercharge the Korean market. Samsung Electronics jumped 14.4%, pushing its market value above $1 trillion. It's now the second Asian company after Taiwan's TSMC to reach that milestone. SK Hynix climbed 10.6% to a fresh all-time high. Together, the two chipmakers account for about 44% of the KOSPI's total market capitalization.
Investors are betting that the AI buildout will keep feeding orders for memory chips and processors. The rally isn't just about tech, though. South Korea's manufacturing PMI hit 53.6 in April, the highest reading since February 2022. Exports rose for an 11th straight month in April, and easing tensions between the United States and Iran have added to the positive risk sentiment across Asian markets.
ETF bets hit extreme levels
Bullish wagers on the iShares MSCI South Korea ETF (EWY) have reached historic extremes. Call option notional open interest hit a record $5.5 billion — that's the total dollar value of outstanding bullish bets, up 600% over the last several weeks. Net inflows into EWY have reached roughly $6.3 billion year to date.
The ETF itself has climbed 68% in 2026 and surged 181% over the past 15 months, making it the best-performing major equity market globally. The sheer concentration of bullish positioning raises the question of how much further the bet can go before a correction, but so far the momentum shows no sign of slackening.
With chip earnings and export data continuing to roll in strong, the market's focus will stay on AI demand and trade policy. The next major test comes later this month when Samsung Electronics reports quarterly earnings. Any sign of slowing orders could temper the rally, but for now the KOSPI's trajectory has no obvious ceiling.
