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SEOUL, May 6 (Yonhap) -- South Korea's main Korea Composite Stock Price Index (KOSPI) surged past 7,380 for the first time Wednesday, as major technology stocks got a boost from expectations that demand for high-end chips would surge as global tech giants race to build ever larger artificial intelligence (AI) data centers.
Investors were also cheered by signs of optimism that the ongoing war in the Middle East will continue to be contained and not spill over into a broader regional conflict.
The benchmark KOSPI closed at 7,384.56, up 6.45 percent from the previous session. The index opened at 7,093.01, marking the first time ever that the main index has surpassed the 7,000-point milestone.
In intraday trading, the index jumped to as high as 7,420 points, led by Samsung Electronics and SK hynix.
The stock market surge also came as U.S. President Donald Trump hinted earlier in the day that he may halt a U.S.-led effort to help stuck ships exit the Strait of Hormuz so a possible deal with Iran to end the conflict could be finalized.
Employees take part in a ceremony at the dealing room of Woori Bank in Seoul on May 6, 2026, to celebrate the benchmark Korea Composite Stock Price Index having risen 447.57 points, or 6.45 percent, to close at a record high of 7,384.56. South Korean stocks shot up, driven by a semiconductor rally and optimism for a potential peace deal in the Middle East. (Pool photo) (Yonhap)
With the KOSPI surpassing 7,000, its market capitalization also surged past 6,000 trillion won (US$4,116 billion) for the first time, according to the bourse operator.
Buoyed by strong gains in stocks related to AI, the KOSPI has been on a record-breaking run for weeks.
It reached 6,600 last Wednesday and shot up more than 5 percent to close over 6,900 on Monday.
Heavy bets on technology stocks, along with signs of truce optimism in the Middle East, were likely to take the KOSPI to a new record high, analysts said, with the main index tracking rallies in the U.S. stock market overnight.
Lee Kyung-min, an analyst at Daishin Securities, said the KOSPI has even more room to gain.
"The KOSPI has continued to rise entirely based on performance," Lee said in a report.
Compared with beaten-down stock markets during the coronavirus pandemic, the so-called price-to-earnings ratio is still low this time, Lee said.
Helped by the AI boom, major technology stocks in Seoul remain remarkably healthy.
Samsung Electronics soared 14.41 percent, and its chipmaking rival SK hynix jumped 10.64 percent.
The historic rally prompted Samsung Electronics to join the exclusive $1 trillion market capitalization club, becoming the second Asian company to do so after Taiwan Semiconductor Manufacturing Co.
Samsung Electronics has recently overtaken Berkshire Hathaway in terms of market capitalization.
The market capitalization of SK hynix also topped 1,133 trillion won.
Meanwhile, top vehicle manufacturer Hyundai Motor gained 2.04 percent, and Kia Motors rose 0.39 percent.
Employees take part in a ceremony at the dealing room of Hana Bank in Seoul on May 6, 2026, to celebrate the benchmark Korea Composite Stock Price Index having risen 447.57 points, or 6.45 percent, to close at a record high of 7,384.56. South Korean stocks shot up, driven by a semiconductor rally and optimism for a potential peace deal in the Middle East. (Pool photo) (Yonhap)
Reflecting the overall bullish sentiment, some analysts have raised their target price for the KOSPI index.
"The outlook for the KOSPI has been increased by the first quarter's performance," Han Ji-young, an analyst at Kiwoom Securities, said.
Han said the KOSPI's performance appears to be supported by leading industries, such as semiconductors.
In one of the more optimistic scenarios, Hana Securities expected the KOSPI to rise above 8,000 this year, based on an assumption that the U.S. Federal Reserve may cut its key rate one or two times.
kdh@yna.co.kr
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