KOSPI Hits 6,600 as KOSDAQ Also Sets Record High; Power Equipment, Shipbuilders and Inbound Consumer Stocks Rally on Earnings

The KOSPI rose as much as 2.2% intraday to a fresh record of 6,622 points, pushing Korea's total market capitalization above 6,000 trillion won for the first time. The KOSDAQ likewise climbed past 1,124 points, breaking through a previous high it had struggled to clear for some time. Foreign investors were net buyers of about 460 billion won and institutions bought more than 1 trillion won, with financial investment firms and pension funds among the institutional buyers, forming a broadly favorable supply-demand backdrop. On the KOSDAQ, institutions also turned net buyers, supporting the rally.

Despite the broad advance, the picture at the individual stock level was mixed. On the KOSPI, 500 stocks rose while 360 fell; on the KOSDAQ, 940 rose while 650 fell — a meaningful share of decliners even amid a record-setting session. Investors holding stocks that rose less than the index, or fell outright, could feel a sense of relative deprivation despite the overall market strength.

With the KOSPI eyeing 7,000, the Buffett Indicator — market capitalization relative to GDP — returned to the spotlight. Under Warren Buffett's framework, a ratio above 200% of GDP is generally read as a sign of overvaluation; with Korea's GDP at roughly 2,500 trillion won, the current market cap already exceeds twice that level, putting the market above that threshold. Still, some argued the comparison oversimplifies matters, since GDP is a backward-looking stock measure while listed companies' earnings — a flow measure — are running nearly double last year's levels. Because GDP tends to lag, whether the market's advance constitutes a bubble will hinge on whether future GDP and corporate earnings growth catch up, and a recent GDP reading that came in roughly double consensus was cited as an encouraging sign.

Against this backdrop, Hyundai Department Store jumped 15.8% to a fresh high, while traditional domestic-demand names Hanwha Galleria and Lotte Shopping, along with food and beverage stocks, also advanced. Since a genuine economic upturn requires both exports and domestic demand to improve together, the day's strength in retail names was seen as a meaningful signal.

Hotel Shilla reported operating profit of 20.4 billion won, far exceeding the consensus estimate of 1.2 billion won, delivering a significant earnings surprise. The result lifted inbound tourism-related stocks broadly, as foreign visitor arrivals to Korea continue to climb. Notably, it was disclosed that CEO Lee Boo-jin purchased roughly 20 billion won worth of company shares on the open market ahead of the earnings release — reportedly her first personal share purchase since becoming CEO in 2011 — a move read as a signal of committed, accountable management.

The rally in Hotel Shilla was attributed to a combination of improved earnings, the controlling shareholder's open-market share purchase, and a structural shortage of hotel rooms in Seoul. The duty-free business remains a lingering concern, though there are signs of recovery as Chinese tourists increasingly favor smaller, higher-volume purchases of K-beauty cosmetics rather than big-ticket luxury goods — suggesting a lower average ticket size but a recovering sales trend. Hotel Shilla withdrew from its Incheon Airport duty-free operation but retained its downtown duty-free store, reducing a significant source of losses.

Among inbound beneficiary stocks, Hotel Shilla and GKL were cited in hotels; Paradise, Kangwon Land and GKL in casinos; and Global Tax Free and Hotel Shilla in duty-free. As foreign tourists increase spending at marts and department stores, Hyundai Department Store, Shinsegae, Lotte Shopping and E-Mart were also flagged as beneficiaries, alongside cosmetics and dermatology-related beauty spending.

Hyosung Heavy Industries reported sales of about 1.3 trillion won and operating profit of about 150 billion won, up 49% year-on-year, sending shares sharply higher and briefly above 4 million won intraday. While the results broadly matched consensus, the confirmation of surging U.S.-bound exports and a swelling order backlog — reportedly enough to cover roughly five years of work — drove the rally. LS Electric also jumped more than 13% following its earnings, reclaiming the 250,000-won level. One brokerage set a target price of 5 million won for Hyosung Heavy Industries, with commentary noting that a high per-share price does not by itself mean a stock is expensive — what matters is corporate value and per-share value.

LS Electric had already carried out a 5-for-1 stock split, bringing its roughly 1-million-won share price down to the 200,000-won range before trading resumed; despite concerns that the resulting increase in float could weigh on the stock, strong earnings more than offset that concern and shares rose. A similar split is now being discussed for Hyosung Heavy Industries, given that trading volume tends to thin out once a share price passes 5 million won — and a split backed by strong earnings would function as a double positive catalyst. The power equipment sector's order books are already full, but since delivery of transformers and other power equipment takes several years not only in Korea but also in the U.S. and Germany, the benefits of capacity expansion will take time to materialize.

Shipbuilding stocks, which doubled or tripled in some cases last year, have cooled somewhat over the past few months, though earnings outlooks remain solid. Hanwha Ocean's shares consolidated ahead of its earnings release scheduled for the afternoon, while Samsung Heavy Industries is due to report on April 30 and HD Korea Shipbuilding & Offshore Engineering and HD Hyundai Heavy Industries on April 30 and May 7, respectively. Behind the sector's pause is the market's demand for a next growth narrative; a new storyline has emerged suggesting the large engines fitted into ships could be repurposed as power sources for data centers, potentially linking shipbuilders to the AI power-infrastructure cycle. Commentary cautioned that such emerging themes always warrant vigilance against overheating, noting parallel discussions of small modular reactors mounted on ships to supply power at sea — underscoring the need to watch what companies say about these themes at upcoming earnings calls.

Goldman Sachs described a KOSPI target of 7,000 not as an optimistic call but as a conservative one, flagging semiconductors, AI infrastructure, defense, power equipment, shipbuilding, corporate governance reform plays, and — unusually — K-culture, entertainment and gaming as sectors to watch. The explicit mention of K-culture alongside the more conventional semiconductor, AI and power equipment themes was seen as notable, suggesting foreign investors may view the sector's relatively high valuations in Korea as justified by its growth potential. Given that analyst reports effectively function as sales tools, the report was also read as a signal that global investment banks may be gearing up for more aggressive competition to sell Korean equities.

This week brings a heavy slate of U.S. big tech earnings. After Wednesday's U.S. market close — early Thursday morning Korea time — Microsoft, Amazon, Meta, Alphabet and Qualcomm are due to report, followed by Apple, SanDisk and Western Digital after Thursday's close. Among these, Microsoft, Amazon, Meta, Alphabet and Apple fall under big tech, Qualcomm under semiconductors, and SanDisk and Western Digital under memory. The scale and trajectory of these companies' AI-related capital spending plans were flagged as a key variable for Korean semiconductor and power equipment stocks this week.

Psychologist Kim Kyung-il argued that differences in investment outcomes stem not from stock selection but from how investors handle their emotions. Most investors make choices driven by present-moment emotion rather than rational analysis, then retroactively construct reasons for those choices — a pattern he said holds true for the vast majority of investors, with only a small minority being exceptions. The key distinction, he said, is that fear is a reaction while courage is a decision; most people let a reaction dictate their decision the instant it arises, whereas allowing some time to pass after an emotional reaction makes it possible to separate the reaction from the decision.

On the psychology behind failing to cut losses, he explained that confirming a loss amounts to acknowledging one's own failure, a painful process that people instinctively avoid. Behavioral economics' loss-aversion research shows that a loss of a given size feels far more painful than an equivalent gain feels pleasurable; the way to overcome this, he said, is to repeatedly practice taking losses that are small in absolute terms but meaningful in percentage terms, building tolerance to failure over time. He likened this to how the U.S. military in World War II trained soldiers in how to surrender, preserving combat strength, while Japanese and German forces, lacking such training, suffered greater losses.

The discussion also covered the difficulty of deciding when to take profits. There is a psychological ceiling to how large a gain investors can tolerate holding, and one strategy offered to overcome this is to keep adding to a winning position as it rises, which raises the average purchase price. This lowers the percentage return but increases the absolute profit, while also reducing sensitivity to the percentage figure and making investors less likely to check the position obsessively.

On the anxiety of feeling left out during a rally — so-called FOMO — the key remedy offered was preventing investors from making a reckless all-in purchase. Rather than directly insisting it isn't too late, a more effective approach is to guide investors toward splitting purchases across a defined price range. On Korean investors' notable preference for leveraged and inverse products, this was attributed to a combination of neurotransmitter-related brain chemistry and cultural factors, underscoring the need for both social and institutional safeguards along with repeated reminders to keep investing from tipping into speculation.