Seoul's benchmark Kospi index experienced a significant rally on Friday, climbing 8.48% to close at 8,422.51 points. This impressive single-day performance contributes to an astonishing 95.43% gain for the index so far in 2026, solidifying its position as the world's top-performing major stock market.
AI Enthusiasm Fuels Semiconductor Gains
A primary driver behind the Kospi's robust growth has been the sustained investor enthusiasm for artificial intelligence (AI) technologies. This sentiment has translated into strong buying activity within South Korea's crucial semiconductor sector, which forms a significant portion of the index's composition. Companies involved in AI-related hardware and software have seen substantial upticks, drawing global investment.
Geopolitical Tensions Ease with Iran Deal Prospects
Beyond the tech sector, market sentiment received a substantial boost from signs of de-escalating geopolitical tensions in West Asia. US President Donald Trump indicated that negotiations with Iran were nearing completion, with a formal agreement potentially finalized within days. Trump's remarks, made on Thursday, suggested that a deal could be signed as early as this weekend, possibly in Europe.
The President also linked the prospective agreement to the reopening of the Strait of Hormuz, a vital global energy shipping route that has faced disruptions. This development eased concerns over regional stability and oil supply, providing a broader uplift to global markets, including South Korea.
"We're going to be subject to the finalisation of documents. It should get done over the next few days," President Trump told reporters, hinting at a formal signing ceremony soon.
Kospi Outperforms Global Peers
The Kospi's year-to-date performance significantly outstrips other leading Asian indices. Taiwan's TAIEX has risen 50.85% over the same period, while Japan's Nikkei 225 has posted a 28.45% gain. This highlights the unique combination of domestic technological strength and favorable external factors propelling South Korean equities.