KOSDAQ Breaks 1,000 Barrier After 4 Years as KOSPI Hesitates Below 5,000

7% in a single day. That's how much South Korea's KOSDAQ surged Monday, breaking above the psychologically important 1,000 level for the first time since 2022. Meanwhile, the main KOSPI index stumbled just short of its own milestone—the elusive 5,000 mark.

A Tale of Two Markets

South Korean markets painted a picture of stark contrasts Monday. The tech-laden KOSDAQ shot up 7.09% to close at 1,000.01, marking its first close above 1,000 in over four years. The benchmark KOSPI, however, fell 40.48 points (0.81%) to 4,949.59, retreating from the 5,000 threshold it has flirted with since Thursday.

Trading volume reached 438 million shares worth 22.5 trillion won ($15.6 billion). Winners outnumbered losers 502 to 391, but institutional and foreign investors sold a combined 1.7 trillion won worth of stocks, while retail investors stepped in with 1.71 trillion won in net purchases.

Samsung Electronics held steady at 152,100 won, but SK Hynix dropped 4.04% to 736,000 won. Automakers also struggled, with Hyundai Motor falling 3.43% and Kia declining 3.51%.

Why Investors Are Holding Their Breath

The market's cautious stance reflects a week packed with potential market-moving events. The Federal Reserve's rate decision looms large, alongside fourth-quarter earnings from tech giants including Samsung Electronics and SK Hynix. "The rosy outlook for fourth-quarter earnings of semiconductor shares have already priced in recent gains," said Han Ji-young, a researcher at Kiwoom Securities.

Geopolitical tensions aren't helping either. Escalating friction between the U.S. and Iran, combined with Washington's ambitions regarding Greenland, has investors on edge. In an interconnected global economy, South Korean markets can't escape the ripple effects of international uncertainty.

The Korean won strengthened 25.2 won against the dollar to 1,440.6, while bond yields fell across the board—three-year Treasury yields dropped 4.1 basis points to 3.096%, and five-year yields declined 3.8 basis points to 3.382%.

What KOSDAQ's Revival Really Means

KOSDAQ's breakthrough above 1,000 represents more than just a number—it signals renewed confidence in South Korea's growth companies after years in the wilderness. The index, heavy with AI, biotech, and gaming stocks, had languished below this level since the tech selloff of 2022.

This divergence between KOSDAQ and KOSPI reveals something deeper about South Korea's economic transition. While traditional conglomerates face questions about their growth prospects, smaller tech companies are capturing investors' imagination with promises of innovation and disruption.

Yet challenges remain. KOSPI's inability to decisively break 5,000 suggests lingering doubts about South Korea's established industrial giants. Can companies like Samsung and Hyundai reinvent themselves for the AI age, or will the next chapter of Korean growth be written by smaller, more agile players?