^{Photo: Bloomberg.com}

Kospi hits historic milestone on global relief rally

South Korea’s Kospi index surged past the psychologically significant 5,000 level on Thursday, marking a major milestone as Asian equities rebounded broadly. The rally followed comments from U.S. President Donald Trump indicating a pullback from earlier threats to impose tariffs on European countries linked to tensions over Greenland.

The benchmark Kospi was last up 1.99%, while the tech-heavy and small-cap Kosdaq index gained 1.73%, reflecting broad-based buying across sectors. The move above 5,000 represents a key technical and psychological breakout for South Korea’s equity market, signaling renewed investor confidence after recent volatility.

Trump comments ease geopolitical and trade fears

Market sentiment improved after Trump said he would not use force to acquire Greenland, helping to defuse concerns over potential U.S. military action in the Arctic region. Speaking at the World Economic Forum in Davos, Trump added that he had “formed the framework of a future deal with respect to Greenland,” in coordination with NATO Secretary General Mark Rutte.

His softer tone on Europe-related tariffs also helped lift global risk appetite, easing fears of a renewed transatlantic trade conflict that could have disrupted global supply chains and weighed on multinational companies.

Tech and industrial stocks lead gains in South Korea

South Korean stocks were led higher by heavyweight technology and industrial names. Battery maker Samsung SDI surged 15.28%, making it one of the top performers on the Kospi. Conglomerate Doosan jumped 8.61%, while index heavyweight Samsung Electronics climbed 3.95%, providing significant upward momentum.

The strong performance in battery and semiconductor-related stocks reflects continued investor optimism around electric vehicles, artificial intelligence infrastructure, and advanced manufacturing, even as macroeconomic data remains mixed.

Weak economic data fails to derail rally

The stock market gains came despite fresh data showing that South Korea’s economy unexpectedly contracted in the fourth quarter. Gross domestic product shrank 0.3% quarter on quarter in the October to December period, marking the sharpest contraction since 2022.

On an annual basis, GDP grew 1.5% in the fourth quarter, while full-year economic growth slowed to just 1%, the weakest performance since 2020, when the economy contracted 0.7% during the pandemic. The data highlights ongoing pressure from weak exports, slowing global demand, and tighter financial conditions.

Despite these headwinds, investors appeared to focus on improving global sentiment and expectations that policymakers may provide additional support if growth continues to soften.

Broader Asia markets mostly higher

Elsewhere in Asia, Japan’s Nikkei 225 rose 1.87%, putting it on track to snap a five-day losing streak. The broader Topix index added 0.88%. Investors in Japan digested fresh trade data showing December export growth of 5.1%, which missed market expectations, but sentiment was supported by the global equity rebound.

Hong Kong’s Hang Seng index moved against the regional trend, slipping slightly as losses in basic materials stocks weighed on the benchmark. On the mainland, China’s CSI 300 index was flat, reflecting cautious trading amid ongoing concerns about domestic growth and the property sector.

Australia’s S&P/ASX 200 gained 0.71%, recovering from losses in the previous session, with miners and financials contributing to the advance.

Wall Street strength sets positive tone

Asian markets took cues from strong overnight gains in the United States. The Dow Jones Industrial Average jumped 1.21%, the S&P 500 climbed 1.16%, and the Nasdaq Composite advanced 1.18%, as investors welcomed signs of easing trade tensions and reduced geopolitical risks.

The synchronized rally across U.S. and Asian markets underscores how sensitive global equities remain to shifts in trade policy and geopolitical rhetoric. For now, Trump’s softer stance has provided a near-term boost to risk assets, helping propel South Korea’s Kospi to a landmark high despite ongoing economic challenges at home.

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