South Korea’s benchmark stock index closed at a record high, as optimism over domestic policy reforms and positive global tailwinds helped extend one of the world’s hottest equity rallies of the year.
The Kospi jumped 1.7% to surpass its previous milestone, reached four years ago. Gains were driven by optimism that President Lee Jae Myung may scrap a previous proposal that sought to lower the threshold for the capital-gains tax on stocks. Index heavyweights Samsung Electronics Co. and SK Hynix Inc. were among the biggest boosts on Wednesday.
The tax plan, which was announced at the end of July, had sparked discontent among the nation’s legions of retail investors and saw the benchmark index slide in August, halting a four-month winning streak. The gauge has risen again in September and is now up 38% in 2025, largely due to enthusiasm for the nation’s ongoing corporate reform campaign as well as the global artificial intelligence boom.
Foreign investors lured by prospects of more shareholder-friendly policies in South Korea’s $2.2 trillion market have helped the Kospi’s ascent. That’s a change from the Covid-sparked retail frenzy that pushed the Kospi to its previous peak in July 2021.
Lee, who was elected in June, has made raising corporate governance standards and improving stock-market returns top priorities. In recent months, policymakers have voted in favour of pivotal law changes to make board members legally accountable to all shareholders. They are also seeking improvements to the voting system for selection of board members, and addressing treasury stock holdings — all with the goal of reining in the nation’s many family-run conglomerates, or chaebols.
“Expectations that the revision of the commercial code will fuel corporate governance reforms have lifted the index thus far,” said Han Sangkyoon, chief investment officer at Quad Investment Management Co. Further gains depend on real corporate action and additional legal reforms to encourage companies to increase shareholder returns, he added.
Global spending on AI is providing a further tailwind for the Korean market, with Samsung and SK Hynix the nation’s two largest stocks. Tech shares gained broadly Wednesday on a push from Oracle Corp.’s bullish cloud outlook.
Wagers on Federal Reserve rate cuts have also helped fuel gains in Asian markets, with stocks in neighbouring Japan climbing to records this week.
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