South Korea's Stock Market Dynamics Amid Global Influences

The Asia-Pacific markets experienced a rebound on January 22, 2026, largely influenced by U.S. President Donald Trump's decision to retract his threat of imposing tariffs on European nations regarding Greenland. This announcement contributed to a positive sentiment in South Korea, where the Kospi index surged by 1.81%, surpassing the 5,000 mark. Notable gains were seen in major companies, with Samsung SDI rising by 13.27% and Doosan by 9%. Despite this, South Korea's economy faced challenges, contracting by 0.3% in the last quarter of 2025, marking the sharpest decline since 2022.

South Korea's Kospi breaches 5,000 as Asia stocks rebound after Trump walks back on Europe tariff threats

President Lee Jae Myung of South Korea indicated that the South Korean won is expected to strengthen to around 1,400 per dollar within the next couple of months. This forecast comes amidst efforts to stabilize the currency, which has been under pressure, partly due to its correlation with the Japanese yen. Lee acknowledged that while domestic policies are being implemented, they alone may not suffice to counteract the won's depreciation. The domestic stock market, which saw a remarkable 76% increase in 2025, is still perceived as undervalued, with ongoing efforts to address factors contributing to the "Korea Discount," such as corporate governance issues.

South Korea's Lee sees won strengthening to 1,400 level, stocks still undervalued

Following a 12-day winning streak, the KOSPI faced a slight decline as investors took profits, particularly affecting export-oriented sectors like automakers and chipmakers. The index dipped by 0.4%, while the growth-focused Kosdaq rose by 0.8%, indicating a potential rotation from large-cap stocks to smaller, high-growth companies. This shift is reflective of investor sentiment amid rising input costs, with producer prices increasing by 1.9% year-over-year in December 2025.

South Korea Stocks Pause After 12-Day RunSouth Korea's Kospi breaches 5,000 as Asia stocks rebound after Trump walks back on Europe tariff threatsSouth Korea's Lee sees won strengthening to 1,400 level, stocks still undervalued.

The recent fluctuations in South Korea's stock market have drawn attention to the impact of global geopolitical tensions, particularly surrounding Greenland. Analysts have noted that these tensions may have contributed to profit-taking behaviors among investors, particularly in major companies like Samsung Electronics and SK Hynix, which saw declines of 4.29% and 4.32%, respectively. This volatility raises concerns about the sustainability of the recent market gains and the broader implications for the South Korean economy.

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President Lee emphasized the need for sustainable policy tools to stabilize exchange rates and expressed optimism about the stock market's potential, stating, "It is now looking at surpassing 5,000 on something we couldn't foresee." Meanwhile, the government continues to monitor the economic landscape closely, balancing domestic policy measures with external influences.

South Korea's Lee sees won strengthening to 1,400 level, stocks still undervalued

• “We will continue to make efforts to find sustainable policy tools to stabilise exchange rates,” — President Lee Jae Myung

South Korea's Lee sees won strengthening to 1,400 level, stocks still undervalued

• “It is now looking at surpassing 5,000 on something we couldn't foresee.” — President Lee Jae Myung

South Korea's Lee sees won strengthening to 1,400 level, stocks still undervalued

The interplay between domestic economic policies and global events continues to shape South Korea's financial landscape, highlighting the complexities of navigating market dynamics in an interconnected world.

South Korea's Lee sees won strengthening to 1,400 level, stocks still undervalued