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Kospi closes above 5,000 in first as investors shrug off Trump tariff threats

Published: 27 Jan. 2026, 19:19 Updated: 27 Jan. 2026, 20:01

Employees celebrate in front of an electronic board showing the Kospi closing above 5,000 for the first time on Jan. 27 at the Korea Exchange in Yeongdeungpo District, western Seoul. [NEWS1]

Threats of higher U.S. tariffs failed to dent investor confidence on Tuesday, as Korean stocks surged past a historic milestone and closed above the 5,000 mark for the first time.

The Kospi closed at 5,084.85, up 2.73 percent on the day, after investors brushed off comments by U.S. President Donald Trump warning of steeper tariffs on Korean exports. The rally marked a decisive breakthrough for the benchmark index, often dubbed the Kospi 5000, after years of anticipation.

Trump said before the market opened that he would raise tariffs on Korean automobiles from 15 percent to 25 percent, citing the National Assembly’s failure to approve a trade agreement. He also said tariffs on lumber, pharmaceuticals and other goods would rise to the same level.

The remarks initially rattled markets. The Kospi fell into the 4,800 range shortly after the opening bell. But the sell-off was brief: The index recovered above 4,900 within 30 minutes and climbed steadily through the afternoon, holding above 5,000 through market close.

Investors largely viewed Trump’s comments as a familiar negotiating tactic and treated the dip as a buying opportunity.

U.S. President Donald Trump visits a Ford production center in Dearborn, Michigan, on Jan. 13. [REUTERS/YONHAP]

“Stock price adjustments driven by tariff issues are likely to remain short-lived,” said Kim Chang-ho, a researcher at Korea Investment & Securities. “Investors should use such pullbacks as opportunities to increase exposure.”

Semiconductor stocks again powered the rally. SK hynix surged 8.7 percent to close at 800,000 won ($550) on strong order news, earning the nickname “800,000 won hynix.” Samsung Electronics climbed 4.87 percent to an intraday high of 159,500 won, moving within reach of the symbolic 160,000 won level.

The two companies accounted for more than 75 percent of Tuesday’s gains, according to Shinhan Securities.

Samsung Securities raised its target price for Samsung Electronics to 200,000 won and for SK hynix to 950,000 won.

The SK hynix logo appears in this illustration taken on Aug. 25, 2025. [REUTERS/YONHAP]

“Rising dynamic random-access memory prices will drive share price gains in the first half, while earnings will sustainably support prices in the second half,” said Samsung Securities analyst Lee Jong-wook.

Automakers hit directly by the tariff threats moved lower. Shares of Hyundai Motor fell 0.81 percent from the previous session, while Kia declined 1.1 percent.

The Kosdaq rose 18.18 points, or 1.71 percent, to close at 1,082.59, marking its highest level since 2000. As of Tuesday, the Kospi has gained 20.7 percent this year, ranking first among Group of 20 countries.

Market attention has shifted to whether the Kospi can hold above the 5,000 level.

While some warn of fatigue after the sharp rally, many analysts view the move as a “level-up phase” rather than a sign of overheating. Even when technology shares lag, funds have rotated into sectors such as automobiles, shipbuilding and defense, a pattern investors see as constructive.

Hyundai signage is seen at the New York International Auto Show Press Preview in New York City on April 16, 2025. [REUTERS/YONHAP]

Kiwoom Securities, which raised the upper end of its Kospi forecast to 6,000, said "upgraded earnings outlooks led by semiconductors, relatively low valuations compared to earnings and favorable foreign investor flows should drive further gains."

“Valuation pressure on the Kosdaq remains significant,” said Kim Seong-no, a researcher at BNK Investment & Securities. “But record-high liquidity in the market leaves room for sector rotation.”

Risks remain. Uncertainty from the United States continues to weigh on sentiment, as Trump’s tariff pressure remains unresolved and U.S. court rulings on the legality of the measures are still pending. A slower pace of interest rate cuts by the U.S. Federal Reserve could also alter global liquidity conditions.

The weak won, hovering in the mid-to-high-1,400 range against the dollar, also stands out as a key variable. If the exchange rate moves beyond the 1,500 won level, companies with large dollar-denominated debt could face heavier financial burdens, and investors have raised the risk of foreign fund outflows.

As the market rally extends, fear of missing out has spread among investors who were slow to jump on the earlier gains.

Individual investors poured 274.9 billion won into the Kodex Kosdaq 150 Leverage Exchange-traded Fund (ETF) on Monday, marking a record inflow, according to Samsung Asset Management. The inflows appear to reflect investors' pursuit of double returns in an effort not to fall behind the market’s sharp rally.

Trading leveraged ETFs requires completing online training provided by the Korea Financial Investment Association, but heavy traffic from retail investors temporarily disrupted the site on Monday.

“Investors who missed out on the Kospi rally are riding policy expectations for a ‘Kosdaq 3000,’ which has amplified fear of missing out,” said Lee Jae-won, a researcher at Shinhan Investment & Securities.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY PARK YU-MI [[email protected]]